CA - Econ M3

_______ is a characteristic of a good or service that can be consumed by many without diminishing its value to others.

Shared consumption

Which of the following is NOT a state or local tax?

Social Security or F.I.C.A. tax

Market failure is the overproduction or underproduction of some goods and services due to producers and/or consumers not having to bear the full costs.

True

Someone who enjoys the benefits of a good or service without paying any of the costs is referred to by economist as a free-rider.

True

This is the tax document that an employer must legally have its employees fill out to be filed with the IRS.

W-4

Someone who enjoys the benefits of a good or service without paying any of the costs is referred to by economists as a _____.

free rider

We expect the ______________ to play a role in correcting market failures like pollution.

government

Source: PBS Video There is knock off "unicorn" in which the counterfeit good is actually the real thing. This known as the _____ market and is worth $40 billon a year.

grey

Which of the following is NOT an advantage of a sole proprietorship?

limited liability

The Law of Diminishing ______ states that as consumers consume additional units of the same good or service in a given time period, their additional satisfaction with each additional unit will fall, often as early as the second unit.

marginal utility

The overproduction or underproduction of some goods and services due to producers and/or consumers not having to bear the full costs is a kind of

market failure

Consumers seek to

maximize utility

An externality in which a third party bears a cost is referred to as a ______ externality.

negaitive

A factory that dumps waste into a town's water supply is an example of a _____ externality.

negative

When negative externalities are present in a market

overproduction will occur.

A business organization owned by two or more people who share in the company's profits and losses, but who must incur unlimited liability is a

partnership

Two or more individuals combining to form a business is known as a

partnership

When a neighbor pays for landscaping services and creates beautiful scene for you to enjoy, that is an example of a _____ externality.

positive

Because most consumers have budget restraints, the amount of utility they receive from a given product is relative to the ______ of that product.

price

A _____ good has benefits only enjoyed by the person who purchased it while a _____ good can be enjoyed by both purchasers and non-purchasers.

private; public

A tax that takes a larger percentage of income as it rises is referred to as a _____ tax and a tax that takes a larger percentage of icome from lower income groups than higher income ones is referred to as a _____ tax.

progressive; regressive

A "flat tax" is best represented by:

proportional taxes

The _____ sector refers to the production and consumption activities of government while the _____ sector refers to private producers acting in markets.

public; private

The chance of losing money on an investment is referred to as _______.

risk

Definition: One person using a good/service impairs or prevents another from using it.

rival

Consumption is the economic term for _____________.

satisfaction

The idea that a tax system that is too complicated for the average person to understand is not fair is based on the ______ standard.

simplicity

A type of business organization that is owned by one person who gets all the profit of the business but assumes all of the risk is a

sole proprietor

Which form of business has the following advantage? Easy to start up and usually has no extra taxes beyond income tax.

sole proprietorship & partnership

A piece of ownership in a company like McDonald's, IBM, Walmart, or Microsoft is a called a share of _________________________.

stock

A ____________ system can provide incentives to individual consumers and producers.

tax

People do not like to pay taxes, according to economists, because of all of the following EXCEPT

the benefits of paying taxes are obvious while the costs are harder to measure.

When goods are not excludable

the free-rider problem prevents the private market from supplying them

A piece of ownership in a company like McDonald's, IBM, Walmart, or Microsoft is a called a share of liability.

true

A tax system can provide incentives to individual consumers and producers.

true

An advantage of a sole proprietorship is keeping all profits.

true

An arrangement in which workers perform only one step or a few steps in a larger production process is called specialization.

true

Consumers seek to decrease the utility of competing consumers.

true

For a positive external benefit, an adjustment to the demand curve would be needed.

true

Source: PBS Video The value of a brand can be proven by 'knock off products."

true

The amount of output produced per unit of input used is referred to as productivity.

true

The government will provide as public goods those goods and services that the market lacks the incentive to produce in the quantities that society desires.

true

The principle that taxes should be based on who can best afford to pay is the benefits received principle.

true

Which of the following is most likely to be a toll good?

tuition paid at a public university

________ is the economic term for satisfaction.

utility

Khan Video Notes: Positive Externalities (trees) What is the solution to "filling" the dead weight surplus area for trees?

$10 tax credit for each tree planted

Khan Video Notes: Positive Externalities (trees) Using your notes and graphic - Which scenario best represents the new adjusted 'optimal' equilibrium price ?

$27

Khan Video Notes: Positive Externalities (trees) Using your notes and graphic - Which scenario best represents the new adjusted 'optimal' equilibrium quantity?

3.3 million

Khan Video Notes: Negative Externalities (plastic bags) Using your notes and graphic - Which scenario best represents the new adjusted 'optimal' equilibrium price ?

3.5 cents

Khan Video Notes: Negative Externalities (plastic bags) Using your notes and graphic - Which scenario best represents the new adjusted 'optimal' equilibrium quantity?

1.8 million bags

Income tax is cover by which Constitutional amendment?

16th

Khan Video: Negative Externalities (plastic bags) In the "plastic bags" example, what is the determined cost (neg. ext.) of producing and supplying plastics bags?

2 cents

Khan Video Notes: Negative Externalities (plastic bags) Using your notes and graphic - After adjusting for negative externalities, the cost of the FIRST bag produced is about:

3 cents

What does the following formula illustrate? MUx/Px = MUy /Py

It reflects the ideal combination of two goods that a consumer should purchase relative to the price of those two goods.

_______ is a characteristic of a good or service whose benefits cannot be denied to those who did not pay for it.

Non-exclusion

Using the matrix from the Khan academy video: come up with an example for each scenario other than what was given by Sal. Be sure to label each scenario along with your new example (i.e. public goods: xxxx)

Private Goods- Cars Common Recourses- Bio Diversity Artifically Scarce- Pay Per View Movies Public Goods- Public Bathrooms, Sanitation

The principle that taxes should be based on who can best afford to pay is the _____ principle.

ability to pay

A gas tax imposed by some states in which those who use the roads more pay more to maintain them is based on the _____ principle.

benefits recieved

A type of business organization that is treated as a legal person and whose owners (shareholders) enjoy limited liability is a

corp

Which form of business has the following disadvantage? It's expensive and complicated to start while possibly requiring lots of time.

corp

Henry Ford is often associated with the ___________________ and introduced a moving assembly line in automobile production in 1913.

division of labor

Equitable is another term for

fair

All goods and services are either produced exclusively by the government or exclusively by the private sector.

false

For a negative external benefit, an adjustment to the supply curve would be needed.

false

It is easy to come to agreement about what is a fair tax system once everyone understands the four standards (ability to pay, efficiency, simplicity, and benefits received).

false

We do not expect government to play a role in correcting market failures like pollution and second-hand smoke.

false

Source: PBS Video Generally, in which industry are "knock offs" best known?

fashion