incidence the burden of taxation on the party who pays the tax through higher

Incidence the burden of taxation on the party who

This preview shows page 4 - 6 out of 49 pages.

incidence - the burden of taxation on the party who pays the tax through higher prices, regardless of whom the tax is actually levied on (page 163) deadweight loss - the decrease in economic activity caused by market distortions (page 166) price controls - an attempt to set prices through government involvement in the market (page 186) price ceiling - a legally established maximum price for a good or service (page 186) black markets - illegal markets that arise when price controls are in place (page 187) rent control - a price ceiling that applies to the market for apartment rentals (page 192) price gouging laws - temporary ceilings on the prices that sellers can charge during times of emergency (page 194) price floor - a legally established minimum price for a good or service (page 196) minimum wage - the lowest hourly wage rate that firms may legally pay their workers (page 202)
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----------------------------------------------------------------------------------------------------------------- When total surplus is maximized, the market will be efficient. (true) It is likely that consumer surplus will decrease and producer surplus will decrease because demand for computers is inelastic. Consumers will share the tax burden with producers. Which statement correctly describes the unemployment situation in South Africa? Unemployment is high despite economic growth following the end of the apartheid. If specialization and outsourcing can harm domestic workers, why do countries still engage in trade? The gains from trade far outweigh the costs, and the economy benefits overall. What creates comparative advantage? specialization A health insurance company may offer its policyholders a discount on their premiums if they prove that they have stopped smoking. What type of incentive is the health insurance company offering? direct Laura leaves her job as an accountant, where she earns $80,000 per year, to start her own business. After the first year, her business earns a profit of $60,000. How would an economist describe the profitability of Laura’s career change? Laura had a loss of $20,000. Although generous disability insurance can help those who have been permanently injured, it can also increase the likelihood that individuals will falsely claim to be disabled. This likelihood is a(n) indirect incentive. The government places warnings on cigarette and liquor packages. These warnings serve as a(n) negative incentive. The basic goal of economics is to address the scarcity problem created because the population’s desire for goods exceeds the ability to produce them. Instead of deciding to finish high school, Cecily could have decided to work full-time. How would an economist explain her decision to receive her high school degree? The benefit of going to high school was greater than the benefit of working full-time. Circular flow model involves individuals trading goods they already have or providing services in exchange for something they want.
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