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13 Cards in this Set
- Front
- Back
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price ceiling
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legally mandated maximum price that sellers can charge for a good
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price floor
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legally mandated minimum price that sellers can charge for a good
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tax incidence
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the manner in which the burden of a tax is shared among participants
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tax wedge
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measures how much the government receives as a result of taxing the labor force
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consumer surplus
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buyers willingness to pay for a good minus the amount the buyer actually pays
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producer surplus
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amount seller is paid for a good minus the opportunity cost to produce it
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total surplus
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is the amount of consumer surplus plus the producer surplus
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deadweight loss
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fall in total surplus that results from a market distortion
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tariff
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tax on a good produced abroad and sold domestically
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efficiency
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property of resource allocation of maximizing total surplus received by all members of society
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positive externality
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uncompensated benefit of one person's activities on the well being of a bystander
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negative externality
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social costs created by the consumption of a good
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corrective tax
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set tax that internalizes and externality
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