Studied by 3 peopleBlack market
________: where goods and services are bought and sold illegally.
Government
________ imposed price controls are necessary for consumers, producers, and societies Price controls:
Inefficient allocation of sales
________: firms willing to sell at a lower price don't always get to do so.
Subsidy
________: an amount of money paid by the government to a firm per unit of output.
Indirect tax
a tax on spending/expenditure
A percentage tax (Ad Valorem)
the tax is the percentage of the selling price
Burden of the tax
who pays the tax
Wasted resources
people spend money, time, and effort to deal with shortages
Inefficient allocation of sales
firms willing to sell at a lower price don't always get to do so
Indirect tax
a tax on spending / expenditure. Governments tax firms which increases its costs
A percentage tax (Ad Valorem)
the tax is the percentage of the selling price
DEED
Define
Explain all key concepts
Example from the real world
Diagram
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CLASPP
Conclusions
Long and short term effects
Assumptions
Stakeholders
Priorities
Pros and cons
The tax burden and elasticity
The outcome of the share of tax burden, size of market and amount of producer/government revenue depends on the PED and PES
Subsidy
an amount of money paid by the government to a firm per unit of output
Black market
economic activity that takes place outside government sanctioned channels
Inefficient allocation to consumers
people who want it and are willing to pay don't get goods and people who are interested in the convenient price get it
Wasted resources
people spend money, time, and effort to deal with shortages
Inefficiently low quality
sellers offering low quality goods at a low price even though buyers prefer higher quality / higher prices
Note 
Flashcard (93)