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Definition: The satisfaction received from consumption; sense of well being.
Utility
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Definition: Cash or in kind benefits given to individuals as outright grants from the government.
Transfer Payments
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Definition: Development of large-scale factory production that began in Great Britain around 1750 and spread throughout Europe, North America, and Australia.
Industrial Revolution
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Definition: Economic units formed by profit-seeking entrepreneurs who employ resources to produce goods and services for sale.
Firms
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Definition: A firm with a single owner who has the right to all profits but who also bears unlimited liability for the firm's losses and debts.
Sole Proprietorship
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Definition: A firm with multiple owners who share the profits and bear unlimited liability for the firm's losses and debts.
Partnership
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Definition: A legal entity owned by stockholders whose liability is limited by their stock ownership.
Corporation
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Definition: An organization consisting of people who pool their resources to buy and sell more efficiently than they could individually.
Cooperative
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Definition: Groups that do not pursue profit as a goal; they participate in charitable, educational, humanitarian, cultural, professional, or other activities, often with a social purpose.
Not-for-Profit Organizations
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Definition: A condition that arises when the unregulated operation of markets yields undesirable results.
Market Failure
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Definition: A sole supplier of a product with no close substitutes.
Monopoly
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Definition: One firm that can supply the entire market at a lower per-unit cost than could two or more firms.
Natural Monopoly
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A good that is both rival in consumption and exclusive, such as pizza.
Private Good
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Definition: A good that, once produced, is available for all to consume, regardless of who pays and who doesn't; such a good is non-rival and nonexclusive, such as a safer community.
Public Good
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Definition: A cost or a benefit that affects neither the buyer or seller, but instead affects people not involved in the market transactions.
Externality
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Definition: The use of government purchases, transfer payments, taxes, and borrowing to influence economy-wide variables such as inflation, employment, and economic growth.
Fiscal Policy
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Definition: Regulation of the money supply to influence economy-wide variables, such as inflation, employment, and economic growth.
Monetary Policy
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Definition: Those with a greater ability to pay, such as those earning higher incomes or those owning more property, should pay more taxes.
Ability-to-Pay Tax Principle
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Definition: Those who get more benefits from the government program should pay more taxes.
Benefits-Received Tax Principle
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Definition: The distribution of tax burden among taxpayers; who ultimately pays the tax.
Tax Incidence
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Definition: The tax as a percentage of income remains constant as income increases; also called a flat tax.
Proportional Taxation
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Definition: The tax as a percentage of income increases as income increases.
Progressive Taxation
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Definition: The percentage of each additional dollar of income that goes to the tax.
Marginal Tax Rate
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Definition: The tax as a percentage of income decreases as income increases
Regressive Taxation
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Definition: The value during a given period of a country's exported goods minus the value of its imported goods.
Merchandise Trade Balance
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Definition: A record of all economic transactions during a given period between residents of one country and residents of the rest of the world.
Balance of Payments
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Definition: Foreign money needed to carry out international transactions.
Foreign Exchange
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Definition: A tax on imports.
Tariff
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Definition: A legal limit on the quantity of a particular product that can be imported.
Quota
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