Unit 14 Flashcards
1
Q
What is an Ad valorem tax?
A
An Ad valorem tax is a tax levied as a percentage of the value of the product.
2
Q
What is the incidence of tax?
A
The incidence of tax is the tax burden on the taxpayer.
3
Q
What is a specific or unit tax?
A
A specific or unit tax is a tax where the amount of tax levied does not change with the value of the product but with the amount or volume of the product purchased.
4
Q
What is a subsidy?
A
A subsidy is a grant given usually by the government which lowers the price of a product, usually designed to encourage production or consumption of the product.
