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24 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Indirect taxes |
Taxes on expenditure |
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Ad valorem taxes (type of indirect tax) |
% of the price of a product |
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Specific taxes (type of indirect tax) |
Set amount per unit of the product |
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Which direction do indirect taxes cause the supply curve to shift in? |
Left |
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What will indirect tax allow the producer to do when demand is inelastic? |
Allow them to pass on some or all of this tax onto the consumer through a higher price
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Indirect tax when demand is... |
Elastic |
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Indirect tax when demand is... |
Inelastic |
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Incidence of tax |
How the burden of tax is distributed between different groups (eg producers and consumers) |
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Grant from the government which has the effect of reducing the costs of production... |
Subsidy |
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Which directors will subsidies cause the supply curve to shift in? |
Right |
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Wage rate |
Amount paid per hour/day/week/month for working |
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Derived demand |
Demand dependant on the demand for the final product |
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What effect does a subsidy have? |
Price will fall and quantity will increase |
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A decease in wage rates... |
Increase in demand for labour |
+ Add a hin |
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3 factors which influence elasticity of demand for labour |
1) elasticity of demand for final product 2) wage area high proportion of total costs, demand elastic 3) replacing labour with machinery, hard to replace - inelastic |
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3 factors which influence demand for labour to particular industry |
1) if labour costs rise relative to cost of machinery, firms likely to replace labour with capital 2) productivity of labour 3) labour market regulations. |
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What does the supply curve of labour show? |
How many people are willing to work given the wage rates |
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If wage rates drop... |
The supply of workers drop as the incentive to work drops |
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2 influencing factors of the elasticity of supply of labour |
1) skills, qualifications are high, supply of labour inelastic 2) level of unemployment, high unemployment, supply elastic |
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5 changes which could cause a shift in supply curve for labour in particular industry |
1) net migration - rise relative to emigration, > shift 2) real wage in other occupations 3) non-monetary factors - eg hours of work 4) income tax rates - reduction might encourage more to seek employment 5) qualifications and legal requirements - increase = decease supply of labour |
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National Minimum Wage |
Rate set by government to specify the lowest legal amount workers can be paid |
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What is the main aim of NMW? |
prevent exploitation of workers and reduce inequality |
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Where is the surplus labour? (Unemployment) |
Q1 to Q2 |
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Unemployment determined by 3 factors... |
1) how high NMW compared to equilibrium wage 2) price elasticity of demand for labour 3) price elasticity of supply of labour |
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