Published on 15 Apr 2013
School
Department
Course
Professor
Oct 1. 2010
Page 10-34
Revenue Taxes – Taxes whose main purpose is to fund government services and programs
Progressive Revenue Taxes – Taxes levied at a higher rate on higher-income taxpayers and at a lower
rate on lower-income taxpayers
Regressive Revenue Taxes – Taxes that cause poorer people to pay a high percentage of income than
richer people say
Restrictive Taxes – Taxes levied to control certain activities that legislators believe should be controlled
Demand – The willingness and ability of buyers to purchase a product or services
Supply – The willingness and ability of produces to offer a good or services for sale
Law of Demand – The principle that buyers will purchase (demand) more of a product as price drops
Law of Supply - The principle that producers will offer (supply) more of a product as price rises
Demand and Supply Schedule – Assessment of the relationship between different levels of demand and
supply at different price levels
Demand Curve – Graph showing how many units of a product will be demanded (bought) at different
prices
Supply Curve – Graph showing how many units of a product will be supplied (offered for sale) at
different prices
Market Price (Equilibrium) – Profit-maximizing price at which the quantity of goods demanded and the
quantity of goods supplied is equal
Surplus – Situation in which quantity supplied exceeds quantity demanded
Shortage – Situation in which quantity demanded exceeds quantity supplied
Private Enterprise – An economic system characterized by private property rights, freedom of choice,
profits, and competition
Competition - The vying among business in a particular market or industry to best satisfies consumer
demands and earns profits
Perfect Competition – A market or industry characterized by a very large number of small firms
producing an identical product so that none of the firms has any ability to influence price