| A | B |
|---|
| Market Equiliibrium | a situation where Qd = Qs |
| Excess Supply | Qd is less than Qs |
| excess demand | Qd is greater than Qs |
| market supply | the supply of all the producers is added together (horizontally) |
| market demand | the deman of all the individuals is added together (horizontally) |
| domestic price | the price of a commodity in NZ |
| world price | the price of a commodity determined by demand and supply in international (world) markets |
| export price | the price of a NZ commodity sold overseas |
| Import price | the price of a foreign commodity which is sold in NZ and which is determined by international demand and supply of the commodity |
| Price Control | Prices enforced by law or regulation with the aim of establishing a price above or below equilibrium price |
| Minimum Price | The lowest price set by law that a commodity can be sold at. If this is set above equilibruim price, it is to protect producers to ensure that they make sufficient profits |
| Maximum Price | The highest price set by law or regulation that a commodity can be sold at. If this is set below equilibrium price, it is to protect consumers, to ensure that certain commodities are affordable |
| Black Market | A market where commodities are illegally sold above the maximum price |
| Rationing | A limit is set on the quantity that can be sold to each customer |
| Direct Taxes | Taxex paid straight to the Government e.g. P.A.Y.E. This tax cannot be passed on to someone else and reduces the money consumers have for spending |
| Indirect Taxes | Taxes collected for the Government by an intermediary (i.e. the seller) and paid over to the Inland Revenue Department e.g. GST. This tax may be passed on to someone else. |
| Subsidy | A payment by the Government to producers which reduces the cost of production |
