Bold Concepts of Chapter 6
1. The _________________________________ is the price that leaves neither a surplus nor a
shortage; this is the price where all the products which are being produced will be consumed. If
a ________________________occurs, then the price is too high and therefore the excess
supply, where quantity supplied is greater than quantity demanded, will tend to force the price
down. If a _____________________________ occurs, then the price is too low and therefore
the excess demand, where quantity demanded is greater than quantity supplied, will tend to
force up the price.
2. If we did not use price as a means to exchange goods and services, we would have to examine
other non-price methods to do so; an example would be to use a ____________________
system, or a system under which an agency such as government decides everyone’s “fair” share.
This method uses _______________________________, or tickets/receipts that entitles the
holder to obtain a certain amount of a product.
3. Sometimes the government may attempt to protect a particular group of people in order to
achieve specific “socially desirable” levels of output. Two examples are using
______________________________________, which is a maximum prices that can be charges
for a product, or _____________________________________, which is a minimum price that
can be charged for a product.
4. The Commodity Credit Corporation, an agency in the Department of Agriculture, tried to help
stabilize the agricultural prices by using Target Prices, which are
______________________________________________________________________________
_________________________________________. The two basic forms the CCC used these
Target Prices was in loan supports and deficiency payments. The loan support was a
________________________________________, which is a loan that carries neither a penalty
nor further obligation to repay if not paid back. The CCC was also forced to use a deficiency
payment, which is _______________________________________________________________
______________________________________________________________________________
__________________________________________.