Chapter 6 Terms

Question 1

Statutory burden

Answer 1

Burden of being assigned by the government to send a tax payment

Question 2

Economic burden

Answer 2

Burden created by the change in after-tax prices faced by buyers and sellers

Question 3

Tax incidence

Answer 3

Division of the economic burden of a tax between buyers and sellers

Question 4

Price ceiling

Answer 4

Maximum price that sellers can charge

Question 5

Price floor

Answer 5

Minimum price that sellers can charge

Question 6

Binding price ceiling

Answer 6

Price ceiling that prevents the market from reaching market equilibrium price, meaning that the highest price sellers can charge is set below the equilibrium price

Question 7

Quantity regulation

Answer 7

Maximum or minimum quantity that can be sold

Question 8

Mandate

Answer 8

Requirement to buy or sell a minimum amount of a good

Question 9

Quotas

Answer 9

A limit on the maximum quantity of a good that can be sold

Question 10

Subsidy

Answer 10

A payment made by the government to those who make a specific choice