Government microeconomic intervention (AS level) Flashcards
Market failure
when the free market does not make the best use of scarce resources
Incidence
The extent to which the tax burden is borne by the producer or the consumer or both
Maximum price
a price that is fixed; the market price must not exceed this price; sometimes called price ceiling
Minimum price
a price that is fixed; the market price must not go below this price; sometimes called a price floor
Buffer stock scheme
a type of commodity agreement designed to limit price fluctuations
Wealth
a stock of assets that has been built up over time
Gini coefficient
a numerical measure of income inequality
Informal economy
the part of the economy that is not regulated, protected or taxed by the government
Minimum wage
the least amount an employer can legally pay one of its workers; it is usually expressed as a wage rate per hour
Transfer payments
a payment made by the government to certain members of the community who may be unable to work or are in need of assitance
Progressive tax
one where the rate of taxation rises more proportionately to the rise of income
Inheritance tax
a progressive tax on an inheritance or gift
Capital tax
a progressive tax paid annually on the difference between the buying and selling price of an asset
