chapter 9.txt

  1. � Barter �
    exchange of goods, services, or assets directly for other goods, services, or assets, without the use of money
  2. � Use Right �
    the right of an owner to use or control a designated property, but not necessarily the right to sell it or give it away
  3. � Comparative Advantage �
    the ability to produce some good or service at a lower opportunity cost than other producers
  4. � Principle of Comparative advantage �
    Gains from trade occur when producers specialize in making goods for which their opportunity costs are relatively low
  5. � Free Trade �
    Exchange in international markets not regulated or restricted by government actions
  6. � Infant industry �
    An industry that is relatively new to its region or country
  7. � Tariff �
    taxes put on imports
  8. � Quotas �
    Restrictions put on the quantities of good that can be imported
  9. � Protectionist Policies �
    the use of tariffs and quotas to protect domestic industries from foreign competition
  10. � Import Substitution Policies - Policies undertaken by goernments seeking to reduce reliance on imports and encourage domestic industry. These often include the use of industry subsidies as well as protectionist policies
  11. inkind transfers
    transfers of goods or services
  12. dependency needs
    the needs to have others provide one with care, shelter, food, and the like when one is unable to provide these for oneself
  13. ability to pay principle
    the idea that the more resources you have, the more you should be required to contribute to public projects
  14. System of transfer also have drawbacks
    the potential disadvantages of trnasfer as a form of distribution include inefficiency and moral hazard, perpetuation of inequality, and resentment due to coercion
  15. moral hazard
    a situation that encourages actors to change their behavior in undesirable ways in order to take advantage of a policy
  16. Lorenz Curve
    a line used to portray an income distibution, drawn on a graph with percentiles of households on the horizontal axis and the cumulative percentage of income on the vertical axis
  17. The Gini Ratio,
    A/(A+B) - a measure of inequality, based on the lorenz curve, that goes from 0 (perfect equality) up to 1 (Complete inequality)
Card Set
chapter 9.txt
distribution exchange and transfer