Max & Min price contorls
where the free market does not make the best use of scarce resources.
one that taxes the income of people and firms and cannot be avoided.
What are direct taxes?
direct payments made by governments to the producers of goods and services.
What are subsidies?
the government provides certain important services free of charge to the user
What is direct provision?
when governments take over a private sector business and transfer it to the public sector.
What is nationalization?
various means by which governments seeks to control production and consumption.
What is regulation?
tax that is levied on goods and services.
What is an indirect tax?
old age pensions ■ unemployment benefits ■ housing allowances ■ food coupons ■ child benefits
What are transfer payments?
Medical care centers which charge almost nothing for services
What are public hospitals?
the sale of a state-owned public sector business to the private sector.
What is privatization?
charges imposed by governments on incomes, profits and some types of consumer goods and services to fund their expenditure.
What are taxes?
the extent to which the tax burden is borne by the producer or the consumer or both.
What is incidence?
a hand-out or payment made by the government to certain members of the community.
What are transfer payments?
Low cost or free education for the poor
What are public schools?
This gives a large addition to government funds (aside from taxes)
What is sale of a public sector company?
a price that is fixed; the market price must not exceed this price.
Maximum price
A tax such that as income rises, the proportion of total income paid in tax falls. Hence, the average and the marginal rates of taxation are falling.
What are regressive taxes?
This results in low priced rice, low priced public transports, low priced university education
What are subsidies?
Direct provision is financed by this. State funds come from this.
What are taxes?
Nationalized law enforcement agency
What is the police?
The effect of setting a minimum price
What is "excess supply"?
Equitable, economic, transparent, convenient
What are the canons of taxation?
Government aid given to lower their costs versus government payments from one group given to another.
What is the difference between transfer payments and subsidies?
The biggest problem of direct provision
Misallocation of resources
Nationalized industries when compared to private industries are accused of being like this.
What is inefficient?
or What is a monopoly?