Definitions
A metaphor to describe how pursuing economic self-interest leaves society better off as a whole.
What is "the invisible hand"?
A compulsory cost paid toward government revenue.
What is a "tax"?
Rival in consumption and excludable.
What is a "private good"?
Congress shall have the power to regulate this with other nations, among the states, and with the Indian tribes.
What is "commerce"?
This founding father wrote the essay "Property."
Who is James Madison?
A legally mandated minimum price for a good.
What is a "price floor"?
The amount of economic efficiency lost due to the imposition of taxes.
What is "deadweight loss"?
What is a "public good"?
This type of government is conducive to an effective free market and the protection of property rights.
What is "limited government"?
Frederic Bastiat used this metaphor to describe how economic actions come with unseen consequences.
What is the "broken window" metaphor?
The property of a good whereby one person’s use diminishes other people’s use.
What is "rivalry in consumption"?
The extra costs that people have to pay after the imposition of a tax.
What is "tax burden"?
Rival in consumption but not excludable.
What is a "common resource"?
When the government seeks to encourage an economic sector, it can infuse cash in the economy by awarding firms with these.
What is a "subsidy"?
According to several sources we read, namely Madison and Friedman, the right to this is necessary for the preservation of rights in general.
What is "private property"?
When scarce resources provide the highest possible benefits at the lowest possible costs.
What is "efficiency"?
A measure of who bears more of the tax burden.
What is "tax incidence"?
Your Netflix subscription is an example of this type of good.
What is a "club good"?
This type of tax can be levied to discourage negative externalities.
What is a "corrective tax"?
Babies, hitchhikers, and a guy who listens to a live band from outside the venue are examples of this.
What is a "free-rider"?
The amount a seller is paid minus the cost of production.
What is "producer surplus"?
Between consumers and producers, the tax burden on a good is always greater for this curve.
What is the "less elastic curve"?
A crowded public pool with an entry fee is an example of this type of good.
What is a "private good"?
Governments typically provide this category of goods because they are not efficiently distributed by the market.
What are "public goods"?
A pollution-heavy and inefficient factory leaving the surrounding communities with lower quality of life and poorer is an example of this.
What is "market failure"?