Chapter 6 (ECON 1001)

Tax on Buyers

A tax imposed on buyers that leads to a decrease in demand due to the increase in price caused by the tax.

Equilibrium

The point where the new demand curve intersects the supply curve, determining the market price and quantity.

Tax Incidence

The division of the economic burden of a tax between buyers and sellers based on the elasticity of demand and supply.

Tax on Sellers

A tax imposed on sellers that shifts the supply curve upwards, increasing the price and reducing the quantity sold.

Subsidy

A payment made by the government to incentivize a specific choice, shifting the demand curve to the right.

Price Ceiling

A government-imposed maximum price that can lead to shortages when set below the equilibrium price.

Price Floor

A government-imposed minimum price that can create surpluses when set above the equilibrium price.

Quotas

Limits on the maximum quantity of goods that can be sold, affecting the market equilibrium and prices.

Quantity Regulation

Imposing restrictions on the quantity that can be sold, influencing market dynamics and prices.

Mandate

Requiring a minimum amount of goods to be bought or sold, impacting market behavior and prices.