Test 1 Chap 1,2,3,6 Flashcards
A society in which a person’s value is measured by their contribution to society
An organic society
Programs who’s expenditures are determined by the number of people who qualify rather than preset budget allocations
Entitlement programs
An empirical study that relies on observed data that is not obtained from an experimental setup
An observational study
Data that contains information on multiple people at a given point in time
Cross-sectional data
Data that contains information on a single entity at different points in time
Time-series data
Data that consists of information on individual entities at different points in time
Panel data
An observational study that relies on circumstances outside the researchers control to mimic random assignment
Quasi-experimental study. Also known as natural experiments
A type of analysis that compares changes over time in the outcome of the treatment group to changes over the same time period In the control group
Difference-in-difference analysis
A type of analysis that relies on finding some variable that affects entry into the treatment group but in itself is not correlated with the outcome variable
Instrumental variable analysis
A type of analysis that relies on a strict cut off criteria for eligibility of the intervention under study in order to approximate an experimental design
Regression discontinuity analysis
The branch of economic theory concerned with the social desirability of alternative economics states
Welfare economics
A society created by the individual to help them achieve their personal goals
A mechanistic society
An allocation of resources where no person can be made better off without making another person worse off
Pareto efficient
A reallocation of resources that makes at least one person better off without making anyone worse off
Pareto Improvement
The slope of the indifference curve
The marginal rate of substitution
A line connecting all Pareto efficient points
The contract curve
A condition of Pareto efficiency:
MRS1=MRS2
A graph that shows the maximum quantity of one output that can be produced given the amount of the other output
The production possibilities curve
The slope of the production possibilities curve
The marginal rate of transformation
Marginal rate of transformation:
MC1/ MC2
A graph showing the maximum amount of one persons utility given each level of utility attained by the other person
Utility possibilities curve
The field that applies economic principles to the analysis of political decision making
Political Economy
The problem With majority voting: community preferences can be inconsistent even tho each individual’s preferences remain constant
Voting paradox
The process of organizing the order in which votes are taken to ensure a favorable outcome
Agenda manipulation
When paired majority voting in more than 2 possibilities repeats indefinitely without reaching a conclusion
Cycling
As like as all preferences are single peaked and several other conditions apply, the outdone of majority voting represents the median voter
Median voter theorem
The trading of votes to pass a piece of legislation
Logrolling
The 6 criteria of Arrows impossibility theorem
- Must produce a decision
- Rank all possible outcomes
- Responsive to individual preferences
- Transitive
- Independence if irrelevant alternatives
- Dictatorship is ruled out
Using the government to obtain higher than normal returns
Rent-Seekig
An arrangement where suppliers band together to restrict output and raise price
Cartel
The best way to measure the size of government is:
Annual expenditures:
Goods and services
Transfers of income
Interest payments on gov debt
The pitfalls of experimental studies
Ethical issues
Technical issues
Unnatural behavior in the experiment
Lack of follow up
