Chapter 6 and General
When the price elasticity of demand is greater than 1
What is elastic or elasticity?
The tax on sales of a good or service
What is an excise tax?
Tax on an individual or family's income
What is an income tax?
Goods and Services purchased from other countries
What are imports?
Canada, United States and Mexico
What is the North American Free Trade Agreement?
The total value of sales of a good or service. Also equal to the price multiplied by the quantity sold
What is total revenue?
A measure of who really pays a tax
What is the incidence of a tax?
The tax on the earnings an employer pays to an employee
What is a payroll tax?
Goods and services sold to other countries
What are exports?
When businesses hire people in another country to perform various tasks
What is offshore outsourcing?
Whether the good is a necessity or luxury
What is a factor that determines elasticity?
The amount of tax people are required to pay per unit of whatever is being taxed
What is the tax rate?
The tax on the value of goods sold
What is a sales tax?
The phenomenon of growing economic linkages among countries
What is globalization?
The willingness to sacrifice some economic payoff in order to avoid a potential loss
What is risk aversion?
The availability of close substitutes
What is a factor that determines eleasticity?
Those who have greater ability should pay more taxes
What is the ability to pay principle?
Takes a larger share of the income of high income taxpayers than of lower income taxpayers
What is a progressive tax?
Analyzes international trade under the assumption that opportunity costs are constant
What is the Ricardian Model of Economics?
The habit of mentally assigning dollars to different accounts so that some dollars are worth more than others
What is mental accounting?
The share of income spent on a good
What is a factor that determines elasticity?
The same for everyone regardless of any actions people take
What is a lump sum tax?
Takes a smaller share of the income of high income taxpayers than of low income tax payers
What is a regressive tax?
A situation in which a country does not trade with other countries
What is autarky?
The tendency to avoid making a decision and sticking with the status quo
What is status quo bias?