Externalities
Your neighbor makes their house look better
Positive Externality
The market value of all FINAL goods and services produced within a country in a given period
GDP (Gross Domestic Product)
A tax that you pay based on your level of income and is usually deducted from your paycheck
Income Tax
non-rival, non-excludable goods
Public Goods
Intermediate or Final Good? The individual tires that Bridgestone produces.
Intermediate
Your neighbor's dog is barking
Negative Externality
People who did not work during the preceding week but made some effort to find work in the past four weeks
Unemployed
Each of you pays a tax when you buy something that the state sets at 7%, and each county can add up to 3% (10% total). What is this tax called?
Sales Tax
What kind of good is it? Why? Anything you buy at the store.
Private Good. (Rival & Excludable)
Name two categories that the government spends tax dollars on.
Schools, Military, Infrastructure (Roads), Parks, Healthcare
More and more high school students are continuing their education by going to college.
Positive Externality
True or False: Inflation is the increase in the price of a good or service.
False. Inflation is the increase of the overall level of prices in an economy over time.
The tax on houses, buildings, and commercial offices
Property tax
What kind of good is it? Why? Tuna fish in the ocean
Common Good (non-excludable & rival)
List 2 physical properties of money
List 1 economic property of money
Physical: Durability, Portability, Divisibility, Uniformity
Economic: Stability of Value, Scarcity, Acceptability
The city of Nashville puts on a fireworks show on the 4th of July. List the costs and benefits associated with the fireworks.
Negative (costs)- loud (babies or animals are scared)
Positive (benefits)- free to watch
True or False: The CPI measures apples to apples.
False. The CPI measures the cost of a "basket" of goods.
Special tax on select things
Excise Tax
What type of good is it? Why? Netflix
Club
Someone left donuts in the break room and left a note asking people to pay $1 if they take a donut. At the end of the day donuts were gone but there was no money in the basket. What problem does this illustrate?
Free Rider Problem
A large corporation pollutes the local water source as they produce tires. What type of externality is this and what is a possible solution?
Negative; Govt. can tax them
GDP that is adjusted for inflation
Real GDP
People with higher incomes pay a higher percentage of taxes
Progressive Tax
Many people in a town own sheep and let them graze in a field. No one owns the field, so all people can use it. As people make more money from selling wool, they buy more sheep and more people come to town to be wool producers. Eventually, the grass can’t grow fast enough and many people suffer. This is an example of what problem?
Tragedy of the Commons
People within the working age (16 to retirement age) who are employed or are unemployed and seeking work
Labor Force