Chapter 3 Homework Flashcards
The increased labor force participation of married women in the United States is most often explained by
increased education and an increased demand for labor
Which component of U.S. household spending has grown the most over the past ten years?
spending on services
The statement “Households maximize utility” means that households
are assumed to do what they think will increase their satisfaction
Household production consists of households producing goods and services, like meals, cleaning and child care, instead of firms.
True
Which of the following is not primarily a function of the federal government
higher education
Most economists assume that the goal of elected officials is to promote the public interest
False
Government policies are coercive, whereas markets are not. This implies that
government can provide some goods and services when private markets fail to do so
Market activity differs from government activity because
markets provide a direct link between benefits and costs
Which of the following taxes is most clearly based on the benefits-received principle of taxation?
gasoline tax
Which of the following taxes is based on the ability-to-pay principle?
income taxes
The incidence of a tax refers to
who bears the burden of the tax
Consider a system in which a person earning $10,000 pays $1,000 in taxes, a person earning $25,000 pays $2,000, and someone earning $60,000 pays $4,000. What type of tax is this?
regressive
During recent elections, consumer groups in various states attempted to get the sales tax on all medicines and drugs removed. They argued that such a tax is “severely regressive.” What is the economic interpretation of their statement?
The poor pay a higher percentage of their income for medicine and drugs than do the rich.
Which of the following is a reason why government is a participant in a market-oriented economy?
to enforce contracts and protect private property
