Chapter Eight: Application - The Costs of Taxation Flashcards
1
Q
Deadweight Loss
A
The fall in total surplus that results from a market distortion, such as a tax
2
Q
Elasticity of the Tax Base
A
The sensitivity of the tax base to changes in the tax rate
3
Q
Marginal Cost of Public Funds
A
The total cost to society of raising one more dollar in tax revenue
4
Q
Marginal Benefit of Public Funds
A
The value that society places on one more dollar or expenditure on a government program
