UTK: Economics 201 - Chapter 3

  1. Definition: The satisfaction received from consumption; sense of well being.
  2. Definition: Cash or in kind benefits given to individuals as outright grants from the government.
    Transfer Payments
  3. Definition: Development of large-scale factory production that began in Great Britain around 1750 and spread throughout Europe, North America, and Australia.
    Industrial Revolution
  4. Definition: Economic units formed by profit-seeking entrepreneurs who employ resources to produce goods and services for sale.
  5. 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
  6. Definition: A firm with multiple owners who share the profits and bear unlimited liability for the firm's losses and debts.
  7. Definition: A legal entity owned by stockholders whose liability is limited by their stock ownership.
  8. Definition: An organization consisting of people who pool their resources to buy and sell more efficiently than they could individually.
  9. 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
  10. Definition: A condition that arises when the unregulated operation of markets yields undesirable results.
    Market Failure
  11. Definition: A sole supplier of a product with no close substitutes.
  12. Definition: One firm that can supply the entire market at a lower per-unit cost than could two or more firms.
    Natural Monopoly
  13. A good that is both rival in consumption and exclusive, such as pizza.
    Private Good
  14. 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
  15. Definition: A cost or a benefit that affects neither the buyer or seller, but instead affects people not involved in the market transactions.
  16. 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
  17. Definition: Regulation of the money supply to influence economy-wide variables, such as inflation, employment, and economic growth.
    Monetary Policy
  18. 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
  19. Definition: Those who get more benefits from the government program should pay more taxes.
    Benefits-Received Tax Principle
  20. Definition: The distribution of tax burden among taxpayers; who ultimately pays the tax.
    Tax Incidence
  21. Definition: The tax as a percentage of income remains constant as income increases; also called a flat tax.
    Proportional Taxation
  22. Definition: The tax as a percentage of income increases as income increases.
    Progressive Taxation
  23. Definition: The percentage of each additional dollar of income that goes to the tax.
    Marginal Tax Rate
  24. Definition: The tax as a percentage of income decreases as income increases
    Regressive Taxation
  25. Definition: The value during a given period of a country's exported goods minus the value of its imported goods.
    Merchandise Trade Balance
  26. 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
  27. Definition: Foreign money needed to carry out international transactions.
    Foreign Exchange
  28. Definition: A tax on imports.
  29. Definition: A legal limit on the quantity of a particular product that can be imported.
Card Set
UTK: Economics 201 - Chapter 3