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20 Cards in this Set
- Front
- Back
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Efficiency Loss of Tax
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tax causes decline in output for chich marginal benefit exceeds marginal cost
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Diamond-Water Paradox
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Price of a product is related to marginal utility not total utility
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Scarcity
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having more of "this" mean having less of "that"
**Choices must be made |
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Economic Perspective
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how to make choices
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Technical Effiency
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least costly way of production
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Production Possibilities Curve
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Max. combination of goods attainable w/ fixed resources and technology
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Diminishing Marginal Utility explains why:
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demand curves are down sloping
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Tax incidence
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who bears the burden of the tax
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Positive Statement
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Fact
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Normative Statement
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Belief
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Comparative Advantage
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a (person) can produce more cheaply than another and still find it beneficial to trade
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Barry Lind
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Price Elasticity less than one for corn
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yacht tax
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failed demand more price elastic
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ceiling prices
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shortages
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price floor
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surpluses
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MR=MC
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only when firm is "price taker"
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Inelastic demand curve excise tax
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buyers
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Elastic demand curve excise tax
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sellers
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Protective Tariff
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increase price and sales of domestic producers
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Comparative advantage
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It is impossible for a nation to have a comparative advantage in producing everything.
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