AP®︎ Microeconomics: Topic 2.8 Flashcards

A fixed tax on each unit sold, shifting supply left or demand left.

Money collected by the government, equal to tax per unit times quantity sold.

Government spending on a subsidy, equal to subsidy per unit times quantity exchanged.

Buyer and seller gains shrink or shift when taxes, subsidies, or price controls change price and quantity.

Government-set price minimums or maximums that affect markets only when they are binding.

A legal maximum price that, when below equilibrium, creates a shortage.

A legal minimum price that, when above equilibrium, creates a surplus.

A government payment per unit that shifts supply or demand outward and increases quantity traded.

The division of a tax or subsidy burden depends on relative supply and demand elasticity.

The loss of total surplus when intervention moves output away from the efficient quantity.

A government limit on output that sets quantity below or above the market equilibrium.