Term
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Definition
| a parable that illustrates why common resources get used more than is desirable from the standpoint of society as a whole |
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Term
| internalizing the externality |
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Definition
| altering incentives so that people take account of the external effects of their actions |
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Term
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Definition
| the idea that taxes should be levied on a person according to how well that person can shoulder the burden |
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Term
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Definition
| total taxes paid divided by total income |
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Term
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Definition
| the idea that people should pay taxes based on the benefits they receive from government services |
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Term
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Definition
| an excess of government spending over government receipts |
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Term
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Definition
| the idea that taxpayers with similar abilities to pay taxes should pay the same amount |
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Term
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Definition
| a tax that is the same amount for every person |
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Term
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Definition
| the extra taxes paid on an additional dollar of income |
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Term
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Definition
| a tax for which high-income taxpayers pay a larger fraction of their income than do low-income taxpayers |
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Term
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Definition
| a tax for which high-income and low-income taxpayers pay the same fraction of income |
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Term
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Definition
| goods that are rival in consumption but not excludable |
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Term
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Definition
| a study that compares the costs and benefits to society of providing a public good |
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Term
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Definition
| the property of a good whereby a person can be prevented from using it |
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Term
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Definition
| goods that are both excludable and rival in consumption |
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Term
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Definition
| goods that are neither excludable nor rival in consumption |
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Term
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Definition
| the property of a good whereby one person's use diminishes other people's use |
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Term
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Definition
| the proposition that if private parties can bargain without cost over the allocation of resources, they can solve the problem of externalities on their own |
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Term
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Definition
| a tax designed to induce private decision makers to take account of the social costs that arise from a negative externality |
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Term
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Definition
| the uncompensated impact of one person's actions on the well-being of a bystander |
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