Midterm 2 Final Review Flashcards
What is a substitute in production?
A substitution in production for a good is another good that producers can produce using the same resources
green vs red bell peppers
What is the deadweight loss from externalities caused by
over producton and under production
What are complements in production
Two goods that are produced together
When do governments have to use value judgements?
When designing a tax and expenditure system, policymakers make THIS TYPE OF VALUE JUDGEMENTS
The normative judgment here is what is the marginal social benefit of the public funds that are distributed
When do governments have to use value judgements?
When designing a tax and expenditure system, policymakers make THIS TYPE OF VALUE JUDGEMENTS
The normative judgment here is what is the marginal social benefit of the public funds that are distributed
Where is importers revenue?
The box under world price and the imported quantity
WORLDPRICE X IMPORTED
Where is importers revenue?
The box under world price and the imported quantity
WORLDPRICE X IMPORTED quantity
What is Pigovian tax taxed on?
A good with external costs, it is meant to be a corrective tax
Double dividend of taxation
A PIGOVIAN TAX, it increases tax revenue!!! while ALSOOO INCREASING EFFICIENCY
What is the only efficienct quantity of public good?
Marginal Social Benefit= Maeginal social cost
How do i visualize subsidy on supply and demadn
Move Demand curve up, Move supply curve down!
How to do tax questions?
STEPS
Quantity of imports how to calculate
Quantity of exports how to calculate
