Define the Following Terms of Coase Theorem from Economics Flashcards

Economics. Study Guide.

101 cards   |   Total Attempts: 182
  

Cards In This Set

Front Back
What is a patent?
assigns property rights for 17 years, intellectual property apply to U.S. government, and can be renewed
What is a corrective tax?
Form of regulation; a tax designed to induce private decision makers to take account of the social costs that arise from a negative externality
Consumer Surplus
Amount consumer is willing to spend minus supplier’s price; the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it
Producer Surplus
How much product sell minus how much supplier paid the producer for it; the amount a seller is paid for a good minus the seller’s cost of providing it
Budget deficit
Owe more money than we make; a shortfall of tax revenue from government spending
Budget Surplus
Make more money than we owe; an excess of tax revenue over government spending; an excess of government receipts over government spending
Trade Deficit
Having more imports than exports; an excess of imports over exports
Trade Surplus
Having more exports than imports; an excess of exports over imports
Welfare Economics
How the allocation of resources affects economic well-being; the study of how the allocation of resources affects economic well-being
Comparative Advantage
Ability to produce goods at a lower cost than other producers; the ability to produce a good at a lower opportunity cost than another producer
Progressive tax
- a tax for which high-income taxpayers pay a larger fraction of their income than do low-income taxpayers- Percentages go up as money goes up- Marginal- Incrementalo For example, percentages go up § 20%,25%,30%- U.S. Tax system
Taxable income is computed as
Total income minus an amount based on the number of dependents (primarily children) and minus certain expenses that policymakers have deemed "deductible" (such as mortgage interest payments, state and local payments, and charitable giving).
Tax liability is calculated:
From taxable income
If your income is $40,000 and your income tax liability is $5,000, your:
Average tax rate is 12.5 percent
Because the marginal tax rate rises as income rises, higher income families, in general, pay ____.
Higher income families, in general, pay a larger percentage of their income in taxes