EMI 14 and 16

EMI14
1. direct taxes- taxes the individual pay the government directly.
indirect taxes- taxes collected by the supplier
specific taxes- a tax that adds a specific amount of tax onto the product price.
ad valorem tax- a tax that add a percentage onto the price of the good.
subsidies- a payment made by the government to the firms to reduce costs of production in order to allow them to lower their prices.
2. in book
3. in book
EMI 16
price ceiling- a price set below the equlibrium price intended to help consumers.
price floor- a price set above the equilibrium price in order to guarntee an income for the producer.
quota- is the minimum sales goal for a set time span.
buffer stock scheme- is an attempt to use commodity storage for the purposes of stabilising prices in an entire economy or, more commonly, an individual (commodity) market.
2. a. they will sell tickets below the equilibrium price to fill up all the seats.
b. in order to have affordable housing there is rent control.
c. medical care has a price ceiling so people can afford it.
d. fuel has a price ceiling so that everyone can afford it.
3. milk and eggs are higher calorie and more luxury goods then rice and wheet also they are more expensive to produce therefore to keep the producers making money but also so that they are more equally spread to the public.
4. look in book