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