Chapter 6: Taxes Flashcards
1
Q
Statutory Burden
A
the burden being assigned by the govenment to send a tax payment - the question is WHO does the burden go to, the seller or buyer?
2
Q
Economic Burden
A
the burden created by the change in the AFTER-TAX prices that buyers and sellers face
3
Q
Tax Incidence
A
the division of tax burden between buyer and seller; depends on elasticity instead of statutory burden. the more inelastic party pays more of the tax
4
Q
Subsidy
A
a payment by the government to those who choose _____. also referred to as a negative tax, it increases quantities demanded and supplied by lowering prices for consumes and raising the revenue for sellers
