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Definition
| The impact of one persons actions on the well being of a bystander |
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| Why do externalities occur? |
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| Occur because something* decision- maker fails to take account of the external effects of his or her own behavior |
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| determined by the optimal amount of the product from the standpoint of society as a whole |
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| Is determined by the quantity produced and consumed in the market equilibrium |
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| if private parties can bargain w/o cost over the allocations of resources, they can sole the problem of externalities on their own. |
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Definition
| that the gov should let people solve externalities on their own. |
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Term
| How do you determine the socially optimal outcome in a coasian bargaining problem? |
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Definition
| the benefit of the settlement to the offended party must exceed the cost to that party. |
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Term
| Define transactions cost? Give an example. |
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Definition
| the cost that parties incur process of agreeing to and following through on bargin. if the benefit less then the cost, then they might leave it alone. |
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| Qmrt is to small, substitise |
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Definition
| corrective tax, deals with neg externalities. does because it taxes them so they reduce pollution, 2 companies, river, 300 tons |
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Term
| is regulation a good methon of dealing with neg production exter? |
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Definition
| No, due to they are regulated and they dont add any economic help |
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Definition
| A tax which high and low income tax payers pay the same fraction of income. |
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Definition
| A tax for which high income-tax payers pay a larger fraction of their income, then low income payers |
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Definition
| the idea that people should pay taxes based on the benefits they receive from the gov services. |
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Term
| Ability to pay principle. |
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Definition
| The idea that taxes should be levied on a person according to how well that person can shoulder the burden |
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Definition
| tax payers with greater ability to pay, should pay more. |
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Definition
| tax payer with similar abilities, should pay the same amount. |
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Definition
| a tax for which high income tax payers pay a smaller fraction of their income other than low income tax payers |
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Definition
| A tax that is the same amount for everyone |
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Definition
| certain amount of income is not taxed, all additional income is taxed at the same marginal rate. |
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Definition
| one person use of the good reduces another persons ability to use it. |
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Term
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Definition
| people can be prevented from using the good. |
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Term
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Definition
| goods that are both excludable and rival, in consumption... Backpack, buy one theres less for others. |
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Term
| Excludable and non rival goods |
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Definition
| Muse, pay to get in, but does not take away from others. |
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Term
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Definition
| neither excludable nor rival, cant be stopped from getting and is still same amount. Air... |
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Definition
| a person who gets good without paying for it... night watch, two people pay third gets without paying. |
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Term
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Definition
| Total net benefit. TNB-TC "Total cost" is greater than 0 |
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Definition
| goods that are rival in consumption, but not excludable. Picking up a rock, can not be stopped, but there is less of it. |
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Term
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Definition
| a parable that illustrates why common resources are used more that is desirable from standpoint of society as a whole |
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Term
| Major state and local tax expenditures |
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Definition
| education, welfare, transportation. |
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Term
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Definition
| Social security,defense, income security,medicare,health(medicaid), Net interest, other... |
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Definition
| Personal income,pay roll tax rates, corporate tax... |
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Term
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Definition
| Sales tax, property tax, personal income tax, corporate income tax. |
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