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Definition
| The price of a good that prevails in the world market for that good |
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Definition
| A tax on goods produced abroad and sold domestically |
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Definition
| The uncompensated impact of one person's actions on the well-being of bystanders |
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Term
| Internalizing the Externality |
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Definition
| Altering incentives so that people take account of the external effects of their actions |
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Definition
| A tax designed to induce private decision makers to take account of social costs that arise from negative externalities |
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Term
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Definition
| The proposition that if private parties can bargain without cost over the allocation of resources, they can solve the problem of externalities on their own |
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Definition
| The costs that parties incur in the process of agreeing to and following through on a bargain |
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Term
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Definition
| The property of a good whereby a person can be prevented from using it |
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Definition
| The property of a good whereby one person's use diminishes other people's use |
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Definition
| Goods that are both excludable and rival in consumption |
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Term
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Definition
| Goods that are neither excludable nor rival in consumption |
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Term
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Definition
| Goods that are rival in consumption but not excludable |
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Term
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Definition
| Goods that are excludable but not rival in consumption |
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Term
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Definition
| A person who receives the benefit of a good without paying for it |
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Term
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Definition
| A study that compares the costs and benefits to society of providing a public good |
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Definition
| A parable that illustrates why common resources are used more than is desirable from the standpoint of society as a whole |
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Term
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Definition
| An excess of government spending over government receipts |
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Term
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Definition
| An excess of government receipts over government spending |
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Term
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Definition
| Total taxes paid divided by total income |
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Term
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Definition
| The extra taxes paid on an additional dollar of income |
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Term
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Definition
| A tax that is the same amount for every person |
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Term
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Definition
| The idea that people should pay taxes based on the benefits they receive for government services |
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Term
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Definition
| A tax for which high-income and low-income taxpayers pay the same fraction of income |
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Term
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Definition
| A tax for which high income taxpayers pay a lower percentage of their income than do low income taxpayers |
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Term
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Definition
| A tax for which high income taxpayers pay a larger fraction of their income than low income taxpayers |
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Term
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Definition
| The limit on the consumption bundles that a consumer can afford |
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Term
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Definition
| A curve that shows consumption bundles that give the consumer the same level of satisfaction |
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Term
| Marginal Rate of Substitution |
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Definition
| The rate at which a consumer is willing to trade one good for another |
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Term
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Definition
| Two goods with straight line indifference curves |
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Term
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Definition
| Two goods with right angle indifference curves |
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Term
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Definition
| A good for which an increase in income raises the quantity demanded |
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Term
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Definition
| A good for which an increase in income reduces the quantity demanded |
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Term
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Definition
| The change in consumption that results when a price change moves the consumer to a higher or lower indifference curve |
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Term
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Definition
| The change in consumption that results when a price change moves the consumer along a give indifference curve to a point with a new marginal rate of substitution |
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Term
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Definition
| A good for which an increase in the price raises the quantity demanded |
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