CHAPTER 6 SECTION 1 NOTES

ECONOMICS

• When you go to the store to buy some­ thing—whether it’s a cellphone, a CD, or a pair of sneakers—you can usually find it. You are benefiting from the free market system at work. Businesses are making enough profit to produce and sell the goods you want at a price you are willing to pay.

MARKET BENEFITS

• In any market supply and demand will equal at only one price and one quantity

EQUILIBRIUM

• Equilibrium is the point of balance at which the quantity demanded equals the quantity supplied
• Disequilibrium occurs when quantity supplied is not equal to quantity demanded in a market

EQUILIBRIUM

• Shortage is an excess of demand
• Surplus is an excess of quantity

WAGE

• Minimum wage is the minimum a worker can be payed for a hour of labor

PRICES

• Price floor is the minimum set price
• Rent control is the price ceiling for apartment rent

THE END