Microeconomics Final!

Medicare is a health insurance program for

-People age 65 or older and is not means tested

In 2014, Heath care expenditures in the United States accounted for ____ of GDP

15%-20%

World Trade Organization

Administers the rules governing trade between its 144 members. Helps producers, importers, and exporters conduct their business and ensure that trade flows smoothly.

NAFTA (North American Free Trade Agreement)

Allows open trade between the US, Mexico, and Canada.

what is the gain to the economy as a whole on the graph?

Gain to consumers-loss to producers- losses to government

Non private solutions to externalities

Gets someone involved (ex police)

Which country has a health care system that directly employs health care workers and runs hospitals and clinics that are free to the public?

Great Britain

factors of production

Land, labor, and capital; the three groups of resources that are used to make all goods and services

private solutions to externalities

Moral codes and private sanctions, charities, relying on the self-interest of the relevant parties, and the relevant parties can enter into a contract.

infant industry argument

New industries in developing countries must be temporarily protected from international competition to help them reach a position where they can compete on world markets with the firms of developed nations.

Where is producer surplus on a graph?

The area below the price and above the supply curve (A) Trapezoid shapes

Given that the definition of poverty has not been adjusted to reflect the long-term rise in average incomes, you would expect _____ in the percentage of the population living below the poverty line.

a decrease

The key distinction between a factor of production and an input is that:

a factor of production earns income from selling its services over and over again, but an input does not

Tragedy of the Commons

a parable that illustrates why common resources are used more than is desirable from the standpoint of society as a whole

Network externalities are often:

a reason for natural monopolies

Much of the rise in income inequality in the past 20 years in the United States comes from:

a rising gap among the incomes of highly educated workers

World Trade Organization (WTO)

a trade organization that replaced the old General Agreement on Tariffs and Trade (GATT)

job creation argument

additional jobs are created in import-competing industries as a result of trade protection

Which example illustrates an environmental policy based on tradable emission permits?

allowing companies to buy and sell the right to a certain level of emissions

Your community requires the sewage-treatment plant to process raw sewage so that it is safe to return the water to the environment. This example illustrates:

an environmental standard

A good is subject to a network externality when:

an increase in the number of other people using the good increases its value to an individual

National Security Argument

an industry vital to national security should be protected from foreign competition, to prevent dependence on imports that could be disrupted during wartime

Both emissions taxes and tradable emissions permits:

are efficient cost-minimizing methods of pollution reduction

Where is consumer surplus on a graph?

below the demand curve and above the price (ABCD)

positive externality

beneficial side effect that affects an uninvolved third party

If a firm hires labor such that W < VMPL, then profit:

can be increased by hiring more labor

In the United States since World War ll, the distribution income has

changed first towards equality, and then toward greater inequality

The poverty threshold is adjusted each year to reflect

changes in the costs of living

When importing products prices.. When exporting products prices...

decrease increase

A high-income. threshold is taxed a certain amount of money. A low-income threshold receives financial assistance in the same amount from government. The value of the marginal dollar of the financial assistance to the family and the taxes paid by the high-income family are:

different since the marginal dollar Is worth more to the low income family

If the world price of a good is above its domestic price, the country will

export that good

Economists believe that looking at the distribution of income by quintiles at one moment overstates the true inequality of income because:

families near the bottom of the distribution in any given year may be having an unusually bad year, while those at the top may be having an unusually good one

The marginal social benefit received from pollution is equal to its marginal social cost in the market for highly polished glass. In this situation:

firms in the market are producing the socially optimal level of pollution

political conservatives and liberals

generally agree on their support of programs associated with the welfare state but disagree on the appropriate extent of these programs

In the United States and other wealthy countries, a large part of welfare state is devoted to payments for:

healthcare

If a nations mini coefficient is raising overtime, it is an indicator of an

increase in income inequality

IF a tariff or quota is placed on something in the US how will that impact the US makers vs foreign makers?

increase profits of US, and decrease profits of foreign

Progress in medical science has contributed to _____ health care costs.

increasing

When a welfare program is provided to those whose income falls below some minimum, it is said to be:

meanstested

private health insure is funded by

members of large pools of individuals, each paying a fixed premium to a private company that agrees to pay some portion of the medical expenses of the members

the value of marginal labor or product (Mvp)

multiplying the price of the output by the marginal product of labor

means tested vs. non-means tested

non means tested means it is not based on income or means of a reciept

If drivers decide to make phone calls without considering the costs imposed on others, the:

number of phone calls made will be higher then the socially optimal quantity

Comparative advantage relates to..

opportunity costs

External benefits are associated with the production of batteries. Without government regulation, the market will:

price batteries at less then marginal social benefit

autarky price

price of a closed economy

According to the Coarse Theorm, when negative externalities are present, a market will

reach an efficient solution if transaction costs are low and property rights are well-defined

environmental standards

rules that protect the environment by specifying actions by producers and consumers

technology spillover

spreading of knowledge across individuals and firms

The efficient rate of emissions occurs when:

the change in social benefits and the change in social costs due to an additional unit of emissions are equal.

Medicade

the government insurance program for low-income individuals & familys that is funded both by the federal government & each individual state

negative externality

the harm, cost, or inconvenience suffered by a third party because of actions by others

Given the general agreement that pollution is undesirable and social welfare is increased by reducing pollution, the optimal level of pollution in a society is:

the level at which MSC=MSB

gain or loss to government on graph

the middle C

compared with other countries of comparable wealth, the United States has

unusually high poverty rates