ECON 2302 Ch.19, Micro Economics Ch. 18, ECON 2302 Ch. 16, Micro Economics Chapter 15

(Exhibit: Income Distribution in the United States) In 1968 and 2010, the lowest 40 percent of the families received _______ and _______ percent of the income, respectively.

15.3; 11.8

Trends toward widespread market deregulation began in the late:

1970's

(Exhibit: Income Distribution) Curve B shows that the lowest quintile of families gets approximately _______ percent of the income.

2-4

Criteria that economists use in selecting a tax system include:

Ability to pay and benefits received

Which of the following is (are) examples of discriminatory practices?

All of the above are examples of discriminatory practices.

Attempts by the federal government to prevent the exercise of monopoly power in the United States are called ___ policy.

Antitrust

Pollution has _______ and _______.

Benefits ; cost

The ___ theory of regulation asserts that firms seek licensing requirements and government action to regulate price to prevent other firms from entering the market:

Capture

The idea that government regulations often end up by serving the regulated firms is called:

Capture Theory of Regulation

The proposition that if property rights are well defined and if bargaining is costless, then the private market can achieve an efficient outcome regardless of which of the affected parties hold the property rights is known as the:

Coase theorem

If a government determines how much and how a polluter must adjust emissions, it is using:

Command and control

The most widely used regulatory approach to environmental pollution is

Command-and-control approach

Selling below cost by foreign firms is called:

Dumping

A cost that is imposed when an action by one agent harms another, outside of any market exchange is a(n):

External cost

Regulation by the government to influence the marketing of medicine and food is accomplished by the:

Food and Drug Administration (FDA)

Market power in the United States was often gained in the latter part of the nineteenth century by:

Forming trusts

Purchases or the production of goods or services by government agencies are called:

Government Purchases

All spending by government agencies is called:

Government expenditures

A merger that combines two or more producers of the same good or service is called a ___ merger.

Horizontal

Damage to the environment occurs because:

In the process of obtaining goods and services we enjoy, pollution occurs

Consumer protection laws generally do not:

Increase consumer choices

Projects that are cooperatively carried out by two or more firms are called:

Joint Ventures

An incentive approach to pollution control is:

Least-cost reduction in emissions

The rate that would apply to an additional $1 of taxable income received by a taxpayer is the:

Marginal Tax Rate

The organized exchange of licenses that enable the holder to pollute up to a specified amount during a given time period is most closely associated with:

Marketable Pollution Permits

Reducing emissions so that the marginal benefit of an additional unit of pollution is the same for all polluters is an example of:

Marketable pollution permits

The effort to change people's behavior by appealing to their sense of values is:

Moral suasion

According to the text, the command-and-control approach to pollution abatement is

Not favored by economists

Selling below cost by foreign firms is punishable under the ____ Act.

Omnibus Trade and Competitiveness (OTCA)

(Exhibit: Correcting for Market Failure: A Public Good) A private market produces R units of output of a public good. The efficient price would be ___ , the efficient output would be___ , which suggests the implementation of government ___ .

P1 ; W ; Subsidy

According to the text, whenever human activity generates a sufficient concentration of a substance in the environment to cause harm to people, it is called:

Pollution

Which of the following statements is true? A. Pollution really is not a problem of alternative resource uses if it actually causes harm. B. Human greed is the most significant cause of pollution. C. Pollution implies scarcity. D. Pollution is not a result of scarcity.

Pollution implies Scarcity

(Exhibit: A Market for Pollution) If there is an efficient level of emissions, it will occur where:

Price is P and quantity equals Q

When two firms agree to collude to establish a price and eliminate price competition, it i called:

Price-fixing

A tax that takes a higher percentage of income as income rises is a(n):

Progressive tax

The assumption that individuals in the public sector make choices that maximize utility is characteristic of the ___ approach to studying public sector choice.

Public Choice Theory

The actions of regulatory agencies that promote the interest of government employees over those of the public can be explained, in part, by the:

Public Choice Theory of Regulation

The study of government expenditure and tax policy and the impacts of these policies on the economy is called:

Public Finance

The attempt of regulatory agencies to find market solutions that are economically efficient is explained by:

Public Interest Theory of Regulation

(Exhibit: A Market for Pollution) If there is neither too little nor too much pollution, the level of emissions per period will be _______, and the market is _______.

Q ; efficient

A decision not to vote because the marginal costs outweigh the marginal benefits is called:

Rational Abstention

According to the textbook, any effort by government to influence or control the choices of private firms and individuals is called:

Regulation

(Exhibit: A Market for Pollution) If there is too much pollution:

Resources will be overalloctaed to the production of the good that is associated with the generation of pollution

As the quantity of pollution emissions rises, the marginal cost of pollution:

Rises

According to the text, the entrepreneurs who led the businesses that began to dominate various industries in the late nineteenth century were sometimes referred to as:

Robber barons

An act that sought to prohibit firms from conspiring to restrain trade was the:

Sherman Antitrust Act

If the marginal benefit received from pollution is equal to its marginal cost, then:

Society's well-being cannot be improved by changing the quantity of pollution

The rule of reason was first considered in the:

Standard Oil Case

Determining whether the burden of taxes fall on consumers, workers, or owners of other factors of production is:

Tax incidence Analysis

The primary source of government revenue is:

Taxes

A public good is one for which:

The marginal cost of adding another consumer is 0

The efficient level of pollution is:

The quantity at which its total benefits exceed its total costs by the greatest possible amount

Situations where whether or not a particular business practice was illegal depends on the circumstances surrounding the action are said to be subject to:

The rule of reason

According to the text, a private economy may generate a distribution of income that is not considered to be satisfactory because:

There is an unequal distribution of talent

Government payments to individuals in the form of grants rather than payments for labor or other services are called:

Transfer Payments

The primary source of the difference between government purchases and government expenditures is:

Transfer Payments

A charge levied on consumers of government provided services is a(n):

User fee

Pollution imposes a cost in the economic sense if it damages plants or animals:

Valued by people

A merger that involves firms at different stages of the production process is called a ___ merger.

Vertical

(Exhibit: Correcting for Market Failure: A Public Good) A private market produces R units of output of a public good. By imposing taxes to finance the public good, the government could move the production from R to the efficient level of production of:

W

Which of the following statements is true?

Wage gaps between women and white males have fallen since the 1970s.

The Coase theorem emphasizes the importance of _______ in the efficient allocation of resources when external costs are present

Well-defined property rights

(Exhibit: Income Distribution) Curve A represents:

a line of equal distribution of income.

Setting a specific income level and then defining a person (or household) as poor if his or her (or its) income falls below that income level is called a(n):

absolute income test.

A money payment that a recipient may spend as he or she wishes is:

cash assistance.

When people with similar economic characteristics experience different economic outcomes because of their race, sex, or other noneconomic characteristics the result is:

discrimination.

Changes in the distribution of income in the United States over the past 40 years or so have brought to the forefront the issue of:

fairness.

Affirmative action attempts to eliminate discrimination by:

increasing the demand for specific groups of labor.

(Exhibit: Income Distribution) Curve B:

is called a Lorenz curve.

If blacks are discriminated against in the labor market relative to whites, then the wage paid to blacks will be _______ whites and the number of blacks employed will be ______ whites, all other things equal.

lower than; lower than

A ___ transfer payment is one for which the recipient qualifies on the basis of ___

means-tested ; income

(Exhibit: Income Distribution in the United States) From 1968 to 2010, the distribution of income in the United States became:

more unequal.

The provision of specific goods and services to poor people is:

noncash assistance.

The annual income level that marks the dividing line between poor households and those that are not poor is the:

poverty line.

The economist Gary Becker concluded that discrimination occurs because of people's:

preferences.

An example of a government purchase is:

public school education

An income test devised to indicate poverty for those people whose incomes fall at the bottom of the income distribution is called a(n):

relative income test.

To the extent that labor market discrimination exists in a country:

the country will not be allocating resources efficiently.

For the most part, poverty programs are funded by _______ government(s).

the federal

(Exhibit: Income Distribution) Curve B indicates that:

the lowest 80 percent of the families get 40 percent of the income.