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ECON200 > FINAL EXAM TERMS > Flashcards

FINAL EXAM TERMS Flashcards

1
Q

private costs

A

costs that fall directly on an economic decision maker

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2
Q

external costs

A

costs imposed without compensation on someone other than the person who caused them; negative externality

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3
Q

social cost

A

the entire cost of a decision, including both private costs and any external costs

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4
Q

private benefits

A

benefits that accrue directly to the decision maker

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5
Q

external benefits

A

benefits that accrue without compensation to someone other than the person who caused it; positive externality

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6
Q

social benefit

A

the entire benefits of a decision, including both private benefits and external benefits

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7
Q

externality

A

a cost or benefit imposed without compensation on someone other than the person who caused it

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8
Q

network externality

A

the effect that an additional user of a good or participant in an activity has on the value of that good or activity for others

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9
Q

production externality

A

an externality that occurs when a good or service is being produced

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10
Q

consumption externality

A

an externality that occurs when a good or service is being consumed

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11
Q

coase theorem

A

the idea that even in the presence of an externality, individuals can reach an efficient equilibrium through private trades, assuming zero transaction costs

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12
Q

pigovian tax

A

a tax meant to counterbalance a negative externality

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13
Q

tradable allowance

A

a production or consumption quota that can be bought and sold

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14
Q

excludable

A

a characteristic of a good or service that allows owners to prevent its use by people who have not paid for it

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15
Q

rival in consumption

A

the characteristic of a good for which one person’s consumption prevents or decreases others’ ability to consume it

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16
Q

private goods

A

a good that is both excludable and rival

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17
Q

public goods

A

a good that is neither excludable nor rival

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18
Q

common resources

A

a good that is not excludable but is rival

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19
Q

artificially scarce goods

A

a good that is excludable but not rival

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20
Q

free-rider problem

A

a problem that occurs when the non-excludability of a public good leads to undersupply

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21
Q

solutions to free-rider problem

A

change social norms, government provision, assigning property rights

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22
Q

tragedy of the commons

A

the depletion of a common resource due to individually rational but collectively inefficient overconsumption

23
Q

solutions to the tragedy of the commons

A

change social norms, government regulation: bans/quotas, property rights: privatization, property rights: tradable allowances

24
Q

factors of production

A

the ingredients that go into making a good or service

25
Q

capital

A

manufactured goods that are used to produce new goods

26
Q

value of the marginal product

A

the increase in revenue generated by the last unit of an input; calculated as the output generated by an input (marginal product) times the unit price of the output

27
Q

human capital

A

the set of skills, knowledge, experience, and talent that determine the productivity of workers

28
Q

rental price

A

the price paid to use a factor of production for a certain period or task

29
Q

purchase price

A

the price paid to gain permanent ownership of a factor of production

30
Q

economic rent

A

the gains that workers and owners of capital receive from supplying their labor or machinery in factor markets

31
Q

efficiency wage

A

a wage that is deliberately set above the market rate to increase worker productivity

32
Q

monopsony

A

a market in which there is only one buyer but many sellers

33
Q

production possibilities frontier

A

a line or curve that shows all the possible combinations of two outputs that can be produced using all available resources

34
Q

efficient points

A

combinations of production possibilities that squeeze the most output possible from all available resources

35
Q

absolute advantage

A

the ability to produce more of a good or service than others can with a given amount of resources

36
Q

comparative advantage

A

the ability to produce a good or service at a lower opportunity cost than others

37
Q

gains from trade

A

the improvement in outcomes that occurs when producers specialize and exchange goods and services

38
Q

lump-sum tax

A

a tax that charges the same amount to each taxpayer, regardless of their economic behavior or circumstances

39
Q

administrative burden

A

the logistical costs associated with implementing a tax

40
Q

proportional/flat tax

A

a tax that takes the same percentage of income from all taxpayers

41
Q

progressive tax

A

a tax that charges low-income people a smaller percentage of their income than high-income people

42
Q

regressive tax

A

a tax that charges low-income people a larger percentage of their income than it charges high-income people

43
Q

income tax

A

a tax charged on the earnings of individuals and corporations

44
Q

marginal tax rate

A

the tax rate charged on the last dollar a taxpayer earns

45
Q

capital gains tax

A

a tax on income earned by buying investments and selling them at a higher price

46
Q

payroll tax

A

a tax on the wages paid to an employee

47
Q

sales tax

A

a tax that is charged on the value of a good or service being purchased

48
Q

excise taxes

A

a sales tax on a specific good or service

49
Q

property tax

A

a tax on the estimated value of a home or other property

50
Q

discretionary spending

A

public expenditures that have to be approved each year

51
Q

mandatory spending

A

public expenditure that “entitles” people to benefits by virtue of age, income, or some other factor

52
Q

budget deficit

A

an amount of money a government spends beyond the revenue it brings in

53
Q

budget surplus

A

an amount of revenue a government brings in beyond what it spends

ECON200 (3 decks)

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