Understanding Taxes and Subsidies

These flashcards cover key concepts related to taxes, subsidies, and their economic implications that were discussed in the lecture.

Estate Tax

A tax on the total value of a deceased person's money and property.

Commodity Tax

Taxes imposed on goods, such as fuel, liquor, and cigarettes.

Deadweight Loss

The loss of economic efficiency when the equilibrium outcome is not achievable or not achieved.

Elasticity of Demand

A measure of how much the quantity demanded of a good changes when there is a change in price.

Elasticity of Supply

A measure of how much the quantity supplied of a good changes when there is a change in price.

Tax Wedge

The difference between the price paid by buyers and the price received by sellers due to tax.

Subsidy

A reverse tax that involves government payments to producers or consumers to encourage production or consumption.

Consumer Surplus

The difference between what consumers are willing to pay and what they actually pay.

Producer Surplus

The difference between what producers are willing to accept for a good and what they actually receive.

Tax Burden

The economic cost borne by buyers or sellers when a tax is imposed.

Natural Gas Tax

A tax applied to the delivery and consumption of natural gas.

High Elasticity

A condition where consumers or producers can easily change their behavior in response to price changes.

Inelastic Demand

Demand is considered inelastic when quantity demanded changes little as price changes.

Equilibrium

The state in which market supply and demand balance each other, and as a result, prices become stable.

National Birth Day

The day of the year on which the largest number of births occurs, often influenced by tax incentives.

Tax Rate

The percentage at which an individual or corporation is taxed.

Health Insurance Mandates

Regulations requiring employers to provide health insurance for their workers.

Apple Sellers Tax

Tax imposed on sellers that affects the supply curve and price equilibrium of apples.

Tax Revenue

Money collected by governments through taxation.

Government Subsidy Costs

The total amount spent by the government to finance a subsidy.