MICRO

characteristic of purely competitive market

"wage takers"

laissez-faire

-competition among firms is a battle for dominance -competition and creative destruction could lead to monopolies -monopoly pricing and profits create incentives for firms that are economically beneficial

with a proportional tax, higher-income persons will pay:

a bigger amount in taxes compared to lower-income persons

the progressive structure of the income-tax system is based on the:

ability-to-pay principle

if a tax is progressive, then:

as the tax base increases, the marginal tax rate is grater than the average tax rate

"rule of reason" is based off of industry ________

behavior

"__________" believe that some monopolists are good monopolists

behavioralists

usury subsidizes ______________ with _______ incomes

borrowers; high

What are the demand and supply determinants of land rent?

demand is the "active"; and supply is the "passive"

with a tax of $4,000 on $20,000 of income and $6,000 on $30,000 of income, the average tax rate is:

equal to the marginal tax rate

a major distinction between government purchases and government transfer payments is that:

government purchases divert resources from private uses to public uses while transfer payments do not

since '75 the distribution of household income in the US has moved towards

greater inequality

economic rent

if a factor of production has no production cost, and has a fixed supply, then payments to that factor constitute__________

the marginal tax rate is the:

increase in taxes as a percentage of an increase in income

what determines interest rate?

inflation risk time to repay amount of money borrowed

the federal personal income tax

is actually less progressive than official tax schedules would indicate because of various tax exemptions and deductions

statistical discrimination

judging of an individual on the basis of the average characteristics of the group to which the individual belongs rather than the individuals characteristics

a regressive tax means that if someone earning $25,000 pays $5,000, someone earning $50,000 must pay:

less than $10,000

the wage rate the firm must pay varies directly with the number of workers employed

monopsony

the actual incidence of payroll taxes, in the consensus view, is:

mor eon the worker than on the employer

monopsony

occurs when a firm has market power in employing factors of production (e.g. labour)

industrial union

organizes a wide range of workers in an industry to gain bargaining power

which statement best describes the overall tax and transfer system of the US?

our tax system does not by itself reallocate income; transfer payments help redistribute income from rich to poor

the major sources of funds for the US Federal government include the following

payroll taxes, borrowing, proprietary income

the circular flow model with government included would show that government:

provides goods and services to businesses and households and pays for them with net taxes

the US Federal expenditures for "pensions and income security" is dominated by:

social security payments

a large portion of these taxes are often borne by the sellers, not shifted to the buyers

specific excise taxes

a tax is regressive if it:

takes a smaller percentage of income as income increases

"transfer payments" may be thought of as:

taxes in reverse

a tax structure is called progressive when:

the average tax rate decreases if income decreases

if government levies a tax or fee on hunting licenses and uses the resulting revenue for wildlife stocking programs, this would be an example of:

the benefits-received principle of taxation

normal profit

the minimum rate of return or payment necessary to keep an entrepreneur in some specific enterprise

in general, the buyers will tend to pay a bigger share of a tax on a good when:

the price elasticity of supply is high andante price elasticity of demand is low

tax incidents decides

who really pays the tax