Market Types
This type of market has one firm that sells a unique g/s.
What is a monopoly?
The difference between private and social costs are __________.
A tax that applies to everyone at the same rate.
What is a flat tax?
A reverse tax!
This type of market has many firms that sell identical products. These firms are price takers.
What is Perfect Competition?
Purchasing a large SUV could be considered to be a negative externality in what ways? List one!
Pollution, danger, ect... any cost barred by the public.
A tax that applies to higher income earners more as a percentage of their income.
What is a progressive tax?
These two sectors are often heavily subsidized in the USA.
What are energy and agriculture?
This market has low barriers to enter with slightly different products.
What is monopolistic competition?
Education is often subsidized because it is considered to be a _____________.
Positive Externality.
A tax that burdens the lower income earner more as a percentage of their income.
What is regressive taxation?
Inequality would be most likely addressed with this tax policy.
What is progressive taxation?
This market is dominated by a few firms.
What is an oligopoly?
What are the three/four primary ways to deal with externalities? List them all.
Taxes/subsidies
Regulation/Ban
Changing Social Norms
A sales tax acts as this type of tax.
What is a regressive tax?
The tax rate paid on the last dollar of income.
What is the marginal tax rate?
When firms work together and they act like monopolies.
What is collusion to form cartels?
The market will often fail to provide goods that are non-excludable and non-rivalrous. What are these goods called?
What is a public good?
This type of tax addresses the economic concern of DMU.
What is progressive taxation?
Economists often suggest market based solutions for negative externalities, what would this look like in practice?
Taxes!