Category: Economics

➤ How do binding price controls create shortages or surpluses?
A binding ceiling below equilibrium causes a shortage because quantity demanded exceeds quantity supplied at the controlled price. A binding floor above equilibrium causes a surplus because quantity supplied exceeds quantity demanded. Both reduce the traded quantity and often lead to rationing, black markets, or unsold inventories.

➤ How does intrinsic or fundamental value differ from market price?
Intrinsic or fundamental value comes from expected cash flows, utility, scarcity, or replacement cost. Market price is what someone pays in a specific trade. Prices can deviate from fundamentals because of speculation, sentiment, transaction costs, or different valuation methods used by market participants.

➤ What is media literacy and why does it matter for judging media effects?
Media literacy means the ability to access, analyze, evaluate, and create media across formats. It helps people detect bias, assess sources, and recognize persuasion, framing, and agenda‑setting. Strong literacy reduces reliance on simplistic effect assumptions and supports informed civic choices, critical thinking, and healthier news consumption habits.