Key Economic Concepts
ability-to-pay principle: The idea that taxes or fees should be higher for wealthier individuals.
administrative cost: The cost associated with administering a law.
adverse selection: The idea that parties who can successfully hide negative information about themselves or their products will seek to transfer that risk to others. Thus, if an insurance company offers the same price to everyone, the worst insurance risks will seek to purchase the insurance. Similarly, if a car owner has a “lemon” (a bad car), he or she will be more likely to try to sell it if it is difficult for buyers to accurately determine the quality of the cars before they purchase them.
antitrust: A branch of law that seeks to reduce the negative ...