the idea that taxpayers with a greater ability to pay taxes should pay larger amounts the idea that taxpayers with similar abilities to pay taxes should pay the same amount a tax for which high income and low income taxpayers pay the same fraction of income a tax for which high income taxpayers pay a smaller fraction of their income than do low income taxpayers (high income taxpayers pay a smaller fraction of income, even though they pay a larger amount) a tax for which high income taxpayers pay a larger fraction of their income than do low income taxpayers the amount a firm receives for the sale of its output the market value of the inputs a firm uses in production total revenue minus total cost input costs that require an outlay of money by the firm input costs that do not require an outlay of money by the firm

1. vertical equity

the idea that taxpayers with a greater ability to pay taxes should pay larger amounts

2. horizontal equity

the idea that taxpayers with similar abilities to pay taxes should pay the same amount

3. proportional tax

a tax for which high income and low income taxpayers pay the same fraction of income

4. regressive tax

a tax for which high income taxpayers pay a smaller fraction of their income than do low income taxpayers (high income taxpayers pay a smaller fraction of income, even though they pay a larger amount)

5. progressive tax

a tax for which high income taxpayers pay a larger fraction of their income than do low income taxpayers

6. total revenue

the amount a firm receives for the sale of its output

7. total cost

the market value of the inputs a firm uses in production

8. profit

total revenue minus total cost

9. explicit costs

input costs that require an outlay of money by the firm

10. implicit costs

input costs that do not require an outlay of money by the firm