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Explain: how supply and demand Compare: a market in Identify: how the government sometimes

Chapter 6 “Prices” (pp. 124) Section 1 “Combining Supply and Demand” PREVIEW OBJECTIVES (pp. 125). Explain: how supply and demand Compare: a market in Identify: how the government sometimes Analyze : the effects of price ceilings and price floors.

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Explain: how supply and demand Compare: a market in Identify: how the government sometimes

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  1. Chapter6“Prices” (pp. 124)Section1“Combining Supply and Demand” PREVIEW OBJECTIVES(pp. 125) Explain: how supply and demand Compare:a market in Identify: how the government sometimes Analyze: the effects of price ceilings and price floors. SECTION FOCUS In an uncontrolled market, the price of a good and quantity sold will settle at a point where the quantity supplied equals the quantity demanded. The government can set a maximum or minimum price, but that can lead to an imbalance between supply and demand.

  2. KEY TERMS: • Equilibrium: • Disequilibrium: • Excess demand: • Excess supply: • Price ceiling: • Rent control: • Minimum wage: Copy Figure 6.1 Finding Equilibrium (pp. 126). Figure 6.2 Excess Demand and Excess Supply(pp. 127). Figure 6.3 The Effects of Rent Control(pp. 129). Figure 6.4 Effects of Minimum Wage(pp. 131).

  3. Chapter6“Prices”Section2“Changes in Market Equilibrium” PREVIEW OBJECTIVES(pp. 133) • Identify: • Explain: • Explain: SECTION FOCUS When a supply or demand curve shifts, a new equilibrium occurs. The market price and quantity sold move toward the new equilibrium. KEY TERMS: • Surplus: • Shortage: • Search costs:

  4. COPY:Figure 6.5, Falling Prices and the Supply CurveCOPY:Figure 6.6 A Change in Supply and Figure 6.7 A Change in Demand Chapter6“Prices”Section3“The Role of Prices” PREVIEW OBJECTIVES(pp. 139) • Analyze: • List: • Explain: • Describe: SECTION FOCUS Goods and services can be divided up among buyers by a central plan or a price-based market system. Prices allow an efficient, flexible exchange of goods.

  5. KEY TERMS: • Supply shock: • Rationing: • Black market: • Spillover costs:

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