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Definition
| Tax on a good/service. Dollar amount per unit sold, not percentage like sales tax. Doesn't matter if tax is levied on consumer or producer; same effect is achieved. |
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| Who pays the majority of the burden of a tax. For inelastic goods, consumers are hurt more. For elastic goods, producers are hurt more. |
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Definition
| Those who benefit from public spending should pay more taxes. I.E. paying tolls for using highways or excise tax on gas for driving on roads. |
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Definition
| Those with a greater ability to pay (more income) should pay more taxes. |
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Definition
| Everyone pays the same proportion of their income. |
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| Those with greater incomes pay a larger percentage of their income. |
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| Those with lower incomes pay a higher percentage of their income. |
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Definition
| Percentage of additional income that is paid as a tax (the tax paid on each additional dollar earned). |
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| Value-added (consumption) tax |
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Definition
| Basically sales tax. Taxes on spending. This is a regressive tax. |
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Definition
| A nation that neither imports nor exports. No trade with other countries. |
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Definition
| The resources a country possesses like land, labor, human capital, etc. |
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Definition
| A measure of which factor is used in relatively greater quantities than other factors of production usually expressed as a ratio of capital/labor or resources/labor. I.E. Cars are capital intensive, clothes are labor intensive. |
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Term
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Definition
| A country will have a comparative advantage in a good whose production is intensive in the factors that are abundantly available in that country compared to other countries. So, India will have a comparative advantage in clothing production since they have an abundance of human capital and clothing is a labor-intensive product. |
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Term
| Infant industries argument |
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Definition
| Giving a new industry protection by levying a tariff on imported products. Ideally the domestic infant industry will gain a comparative advantage and not require the tariff protection after a short time. |
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Term
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Definition
| A business's revenue minus explicit costs and deprecation. |
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Term
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Definition
| A business's revenue minus explicit costs, deprecation, and implicit costs. |
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Definition
| The additional cost of producing one more of a good/service. |
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Definition
| The additional benefit earned from producing one more good/service. |
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Term
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Definition
| A cost that has already been incurred and cannot be recovered. |
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