ECO-2000 Study Guide - Midterm Guide: Tax Rate, Laffer Curve, Adjustable-Rate Mortgage
Document Summary
Shortage: of housing because rent control, at lower price less people want to rent them. Rent control leads to shortages: a declining in the supply of future rental housing, a decline in quality of rental housing, non price methods of rationing. Black market behavior: i slip you 600 if you let me stay here , should we legalize marijuana, cost: Tax incidence: the way the burden of a tax is distributed among economic units: does not depend on whom the tax is imposed. Who bears the burden of the tax doesn"t matter: tax incidence does depend on elasticity: The burden of he tax will fall on those who are inelastic. Dead weight loss will be lower if tax is on inelastic. Average tax rate: the percentage of income paid in taxes. Progressive tax: average tax rate rises with income income ^ tax : 2.
