2.3 gov intervention Flashcards
1
Q
indirect tax
A
imposed on spending to buy goods and services, raising cost of production and lowering market supply
2
Q
specific tax
A
A type of indirect tax that is set at a fixed $/unit
3
Q
Ad valorem tax
A
A type of indirect tax that is set at a percentage of the selling price
4
Q
subsidy
A
Cash payments by the government to firms to lower their cost of production
5
Q
Price ceiling
A
A legal maximum price for a good or service, set below the market equilibrium price
6
Q
Price floor
A
A legal minimum price for a good or service, set above the market equilibrium price
