Competition and Market Structure
What is Profit Maximizing?
1. occurs where marginal revenue is equal to marginal cost
What are Nominal Wages?
The wages workers are paid without adjusting for inflation.
What is Accelerated Depreciation?
earlier and larger depreciation charges that allowed
firms to reduce federal income tax payments
What is the Public Sector
the part of the economy consisting of federal, state, and local governments
Reasons for Immigrating ?
1. Financial opportunities
2. Political freedom
3. War and/or Civil unrest
4. Pulled from home country by family members/ friends
What is Imperfect Competition?
A market structure in which all firms sell a similar but not identical product.
Name Types of Unions
1. Craft Union or Trade Union: for specific skills
(Cigar Makers Union was one of the first)
2. Industrial Union: for workers in same industry, regardless of job
(automobile industry unions)
What is Capital Gains?
profits from the sale of an asset (stocks) held for twelve months or longer
What is the Private Sector
the part of the economy made up of private individuals and privately owned businesses
Struggles for new Immigrants?
b. language
c. education
d. credibility/ acceptance
e. economic positioning
f. citizenship/ ability to gain meaningful employment
What is Pure Competition
A theoretical market structure that requires three major conditions: very large number of buyers and sellers, identical products, and freedom of entry and exit
What is Two Tier Wage System
system that keeps wages high for current workers, but has a lower wage for newly hired workers
There are different Tax Approaches; what is flat tax?
proportional percentage tax across the board
Advantage is it simplifies the tax code. Disadvantage is that it removes incentives
for deductions.
What are intergovernmental expeditures?
funds that one level of government transfers to another level for spending
What does LDC Stand For
Less Developed Countries
State the assumptions underlying the theory of Imperfect Competition.
1. includes: Monopolistic Competition, Oligopoly, Monopoly
2. exists because it lacks one or more of the conditions required for perfect competition
What are Noncompteting Groups?
collections of workers who do not compete with each other for employment because the skill and training of the workers in one group are substantially different from those of the workers in other groups
What are three kinds of taxing?
Proportional Tax, Progressive Tax, and Regressive Tax
What is entitlement program
broad social program with established eligibility requirements to provide healt, nutritional, or income supplements to individuals
What is the Arbitrage Model ?
jobs move to nations where labor and the cost of doing business is inexpensive, or impoverished labor moves to nations with higher paying jobs. Migration is an arbitrage activity in the most simple model. Difficult to consider other issues in a straightforward fashion. Helps us predict wage equalization in the absence of policy intervention.
advantages imperfect competition may offer to consumers.
Greater choice
Normal Profit
Lower prices
Innovative goods/services
Access to information
Define a Bilateral Monopoly
a market in which there is a single seller (monopoly) and a single buyer (monopsony)
What is intergovernmental revenue?
funds collected from one level and transferred to
another. For example, federal government transferring tax dollars to state level for
education
Impacts of national debt
1. Affects economy by transferring purchasing power, reducing economic
incentives, causing a crowding-out effect, and redistributing income
Explain What Social Capital is?
resources embedded in one's social networks, resources that can be accessed through ties in the networks.