Chapter 5 - Public Spending and Public Choice

Question 0

occur when the consequences of an economic activity spill over to affect third parties

Answer 0

externalities

Question 1

occurs when too much money is going to one economic component

Answer 1

market failure

Question 2

parties who are not directly involved in a given activity or transaction

Answer 2

third parties

Question 3

rights of an owner to use and exchange property

Answer 3

property rights

Question 4

externalities are examples of blank

Answer 4

market failures

Question 5

pollution is an example of a negative blank

Answer 5

externality

Question 6

market overallocates externality

Answer 6

external costs

Question 7

two things to promote competition

Answer 7

antitrust legislation and monopoly power

Question 8

laws that restrict the formation of monopolies and regulate certain anticompetetive business practices

Answer 8

antitrust legislation

Question 9

a firm that can determine the market price, in the extreme case is the only seller of a good or service

Answer 9

monopoly

Question 10

public goods to which the principle of blank consumption does not apply

Answer 10

rival

Question 11

goods that may be consumed jointly by many individuals at the same time

Answer 11

public goods

Question 12

blank goods can be consumed by one individual at a time

Answer 12

private goods

Question 13

when only one person can have this good then this exists unlike when the good is open for public consumption

Answer 13

principle of rival consumption

Question 14

arises when some individuals take advantage of the fact that others will take advantage of the fact that other will take on the burden of paying for public goods

Answer 14

free rider problem

Question 15

difficult to charge for a public good based on consumption

Answer 15

exclusion principle

Question 16

goods deemed socially desirable through the political process

Answer 16

government sponsored goods

Question 17

goods deemed socially undesirable like certain drugs

Answer 17

government inhibited goods

Question 18

money payments made by governments to individuals for which in return no services or goods are rendered like social security checks

Answer 18

transfer payments

Question 19

payments that are in the form of goods and services like food stamps

Answer 19

transfers in kind

Question 20

all federal, state and local spending

Answer 20

government outlays

Question 21

how voters, politicians, and other interested parties decide things

Answer 21

collective decision making

Question 22

system of rewards and punishments individuals face with respect to their actions

Answer 22

incentive structre

Question 23

goods and services provided by the public sector

Answer 23

government or political goods