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PIGOUVIAN TAX: A tax on an external cost, such as pollution, designed to use market forces to achieve an efficient allocation of resources. A. C. Pigou, one of the first economists to study the market failure of externalities, is credited with developing this tax system for internalizing costs external to the market. An external cost caused by pollution, for example, can be internalized if polluters pay a tax equal to the value of the external cost.
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ABSTRACTION Simplifying the complexities of the real world by ignoring (hopefully) unimportant details while doing economic analysis. Abstraction is an essential feature of the scientific method. Hypothesis verification, model construction, and comparative static analysis are not possible without abstraction.
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The penny is the only coin minted by the U.S. government in which the "face" on the head looks to the right. All others face left.
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"It's usually the last ounce of effort that tips the scales of success." -- Rick Beneteau
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ACBS
Accrediting Commission for Business Schools
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