Elasticity
Price * Quantity
What is total revenue?
A tax charged on each unit of a good or service.
What is an excise tax?
When no trading occurs between countries.
What is autarky?
Requires an outlay of money.
What is an explicit cost?
A measure of satisfaction for consuming goods and services
What is utility?
Ed>1
What is elastic demand?
A measure of who really pays the tax.
What is tax incidence or the burden of taxation?
Goods and services purchased from other countries.
What are imports?
TR-TC
What is the equation for profit?
A change in total utility
What is marginal utility?
Cross-price elasticity of demand is positive.
What are substitutes?
Tax*Quantity
What is tax revenue?
A tax levied on imports.
What is a tariff?
The additional cost incurred by producing one more unit.
What is marginal cost?
Each unit adds less to total utility than the previous unit.
What is diminishing marginal utility?
Income elasticity of demand is greater than 1.
What is income elastic?
Some mutually beneficial transactions never take place.
What is deadweight loss due to taxation?
The price a good can be bought of sold abroad.
What is the world price?
A cost that has been incurred and is non-recoverable.
What is a sunk cost?
The equation for the optimal consumption bundle.
What is MU1/P1 = MU2/P2 ?
The definition of price elasticity of supply.
What is % change in quantity supplied divided by % change in price?
Consumers pay a larger proportion of the tax.
When elasticity of demand is more inelastic and supply is more elastic.
National security, job creation, and infant industry.
What are three argument for trade protection?
TR - Explicit Costs - Implicit Costs
What is Economic Profit?
A line that shows all affordable consumption bundles
What is a budget constraint (or budget line)?