1.1 Describe the major challenges societies face.
The main challenge societys face has to be the economy.
The economy is something that impacts everyone whether rich or poor.
If there is an economic drop people from all walk of life are impacted.
ability-to-pay principle the view that those with greater income should pay more in taxes
than those with less income.
absolute advantage a situation in which a person or country is more efficient at producing a
good in compariso
1. A tax imposed on imports is called a: tariff
2. This result proposes that private parties (consumers and producers) can solve the
problem of externalities on their own: Coase Theorem
3. Two important characteristics of a public good are: Non-excludable