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Econ > Externalities and the Tax System > Flashcards

Externalities and the Tax System Flashcards

1
Q

Uncompensated impact of one person’s actions on the well-being of a by-stander.

A

Externality

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2
Q

Impact on a bystander is adverse.

A

Negative externality

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3
Q

Impact on bystander is beneficial.

A

Positive externality.

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4
Q

Value to customers (price they are willing to pay)

A

Demand curve

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5
Q

Cost to suppliers

A

Supply curve

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6
Q

The demand curve reflects

A

value to buyers

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7
Q

The supply curve reflects

A

cost to sellers

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8
Q
A
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9
Q

absence of externalities

A

market equilibrium is in effect

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10
Q

the cost to society of producing a good

A

negative externality

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11
Q

social value curve is above the demand curve

A

positive externality

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12
Q

markets produce larger amounts than is socially acceptable.

A

negative externality

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13
Q

markets produce a smaller quantity than is socially desireable.

A

positive externality

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14
Q

protects inventor rights by giving exclusive use of their inventions for a period of time.

A

Patent law

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15
Q

Solution to externality

A

coase theorem

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16
Q

private parties can bargain without cost over allocation or resources. Can solve problems of externalities on own.

A

coase theorem

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17
Q

The uncompensated impact of one person’s actions on the well-being of a bystander

A

Externality

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18
Q

Impact on bystander is adverse

A

negative externality

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19
Q

impact on bystander is beneficial

A

positive externality

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20
Q

___ protects the interests of bystanders.

A

the government

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21
Q

the demand curve is the

A

value to customers

22
Q

prices customers are willing to pay

A

demand curve

23
Q

cost to suppliers

A

supply curve

24
Q

equilibrium quantity and price

A

maximizes sum of producer and consumer surplus

25
Q

the demand curve reflects

A

the value to buyers

26
Q

the supply curve reflects

A

the cost of sellers

27
Q

the social cost is a

A

negative externality

28
Q

social cost of a good exceeds private cost

A

presence of a negative externality

29
Q

Internalizing the externality

A

altering incentives so that people consider external effects of their actions.

30
Q

Education

A

Positive externality

31
Q

social value of the good exceeds the private value.

A

positive externality

32
Q

when the socially optimal quantity is greater than the market equilibrium quantity.

A

positive externality

33
Q

Government corrects market failure.

A

Positive externality

34
Q

markets produce a larger quantity than is socially desirable.

A

negative externality

35
Q

produce a smaller quantity than is socially desirable

A

positive externality

36
Q

tax

A

negative externality

37
Q

technology spillover

A

positive externality

37
Q

subsidy

A

negative externality

38
Q

government intervention in the economy that aims to promote technology-enhancing industries.

A

industrial policy

39
Q

protect rights of inventors with exclusive rights to their inventions

A

patent

40
Q

command and control policies

A

regulate behavior directly

41
Q

provide an incentive for decision makers to choose to solve the problems on their own.

A

market-based policies

42
Q

corrective taxes and subsidies

A

market-based policy

43
Q

tradable pollution permits

A

market-based policies

44
Q

Induce private decision makers to take account of the social costs that arise from a negative externality

A

corrective tax

45
Q

Places a price on the right to pollute

A

corrective tax

46
Q

Raise revenue for the government

A

corrective tax

47
Q

corrective taxes (pay to__)

A

government

48
Q

sets the price of pollution

A

corrective tax

49
Q

sets quantity of pollution

A

pollution permits

Econ (3 decks)

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