Economics Chapter 4

  1. The most desired goods and services that are given up in order to obtain something else?
    Oppurtunity Cost
  2. An increase in the average level of prices?
  3. Referred to as the "invisible hand"?
    Market Mechanism
  4. The idea that government intervetntion fails to imporve economic outcomes?
    Government Failure
  5. An industry in which a single firm achieves economies of scale over the entire range of output?
    Natural Monopoly
  6. A tax system in which tax rates fall as income rises?
    Regressive Tax
  7. A form of government intervention to address the FOR WHOM question?
    Transfer Payments
  8. Theory that emphasizes the role of self-interest in public decision making?
    Public Choice
  9. The ability to alter the market price of a good or service?
    Market Power
  10. A tax system that levies the same rate on every dollar of income?
    Proportional Tax
  11. The most desirable combination of output attainable with existing resources, technology, and social values?O
    Optimal Mix of Output
  12. Occurs when people are willing to work but are unable to find jobs?
  13. The market failure that occurs because of secondhand smoke?
  14. A tax system in which tax rates rise as incomes rise?
    Progressive Tax
  15. Consumption by one person precludes consumption y others?
    Private Good
  16. An imperfection in the market mechansim that prevents optimal outcomes?
    Market Failure
  17. Only one producer in an industy?
  18. A good or service that society believes everyone is entitled to a minimal quanity of such, as food?
    Merit Good
  19. Can be consumed jointly?
    Public Good
  20. One who does not pay but still enjoys the benefits?
    Free Rider
  21. The legislation used to prevent or break up concentrations of market power such as Microsoft?
Card Set
Economics Chapter 4