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Principles of Microeconomics- Chp. 6
06E:001 U of Iowa Book: Principles of Microeconomics 4th Edition By: N. Gregory Mankiw
5
Economics
Undergraduate 1
02/16/2011
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Term
Price Ceiling
 Definition
a legal maximum on the price at which a good can be sold
Term
Price Floor
 Definition
a legal minimum on the price at which a good can be sold
Term
Not Binding
 Definition

the price ceiling if the price that balances supply and demand is below the ceiling

OR

when the equilibrium price is above the price floor
Term
Binding
 Definition

the price ceiling if the price that balances supply and demand is above the ceiling

(causes shortage)

OR

if the equilibrium price is below the price floor

(causes surplus)

 
Term
Tax Incidence
 Definition
the manner in which the burden of a tax is shared among participants in a markey
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