Econ Midterm
Minimum wage is an example of
a binding price floor which results in a surplus
A tax designed to induce private decision makers to take account of the social costs that arise from a negative externality
a corrective tax
When government imposes a binding price ceiling on a competitive market
a shortage of the good arises
A tax added on to the price of a product
can be subtracted from total consumer and supplier surplus
word in latin means "all else equal"
ceteris paribus
The amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it
consumer surplus
when we are discussing events which effect elasticity, we are most likely referring to
determinants
The property of distributing economic prosperity uniformly among the members of society
equality
The impact of one person's actions on the well-being of another
externality
In the circular model of an economy
factors of production are owned by households
Compared to short-term demand, long-term demand for almost all products is
more elastic
In competitive markets
There are many buyers and sellers
A common argument for trade protection is
infant industry argument
When altering the incentives so that people take account of negative effects of their actions, we are
internalizing the externality
A tariff
is a tax on goods produced abroad
The idea that lowering taxes in a high tax environment would actually raise tax revenue
is credited to an economist named Arthur Laffer
Market power and externalities are examples of
market failure
A change in price
results in a change in quantity demanded
The names of the natural gas and oil reserves deep below areas of eastern Ohio and western Pennsylvania are
the Marcellus and Utica reserves
An externality occurs when
the cost to society of producing a product is larger than the cost to producers
The greater the elasticities of supply and demand
the greater the deadweight loss of a tax
The law of Supply states
the quantity supplied of a good rises when the price of the good rises
The amount a buyer will pay for a good
willingness to pay
