Income Disparity
What does GDP stand for?
Gross Domestic Product
True or False: Free Riders are those individuals that never have to pay taxes or other bills.
True
In what type of market are sellers and buyers price takers rather than price makers?
- Oligopoly
- Less than perfect
- Franchise
- Perfect
Perfect
Who would hurt most if Sales Taxes are flat rate instead of progressive if each person buys 10 identical items?
- A millionaire
- A working-class person
A working-class person
True of False?
Foreigners cannot buy U.S. stocks and bonds, and Americans can buy stock and bonds from other stock exchanges.
False. Foreigners can buy U.S. stocks and bonds, and Americans can buy stock and bonds from other stock exchanges.
A fancy economist's term for how much a person produces—in this case, an average person in each of these countries.
Productivity
Self-reinforcing cycles where price increases beget wage increases which beget more price increases are known as?
Inflationary spiral
BMW makes a luxury car called which sells for approximately $500,000 base price. What aspect of price elasticity does this reflect?
- Elastic demand
- Inelastic demand
- Variable demand
- Undifferentiated demand
Elastic demand
Why is the income from investments or interests called “Unearned Income”, as opposed to “Earned Income” generated from salaries and wages?
“Unearned Income” from investments and interests are not directly the result of the recipient's own work.
A surplus occurs when the value of the U.S. farmer’s exports ________ the value of _______ types of imports.
- exceeds, similar
- exceeds, different
- limits, similar
- limits, different
exceeds, similar
Which of the following countries has the highest income disparity?
- Brazil
- USA
- China
- Australia
USA
When the government spends money to stop or minimize a market downturn or, gives households or businesses more money to spend, what is that known as?
Fiscal stimulus
Hollywood creates many movies and operates with many specialized firms who perform certain tasks such as editing, special effects, trailers, etc. This is called:
Vertical Disintegration
Using the Graduated Rates table below, calculate the total tax payable for an income of $28,000.
Graduated Rates | ||
Tax Rate | Income Range | Tax Amount |
30% | $50,000+ | $300 |
20% | $30,000+ | $4,000 |
10% | $10,000+ | $1,000 |
$0 | ||
1,000 + 4,000
= $5,000
Name any two enablers of globalization.
-Transportation
-Technology
-Know-how
-Communications
Name one of the five factors that goes into measuring productivity.
Effort
Natural Endowments
Specialization & Trade
Know-how
Quality of Institutions
During this kind of economical spiral, the government will provide fiscal stimulus.
(Hint: It is the opposite of inflation)
Deflationary Spiral
If a product has a lot of substitutes, the demand is more likely to be:
Elastic demand
Elasticity of demand is how sensitive buyers and sellers are to changes in price. If a product has a very HIGH ELASTICITY on the buyer’s end, what would most likely happen if the government placed a 5% tax? Who will most likely pay for the extra cost?
The price would most likely stay the same, or reduced by 5%, as the seller will most likely absorbs the extra cost.
When a country runs a trade deficit, then the value of its currency goes ________ to reflect the ________ in its relative productivity or competitiveness.
- down, decline
- up, increase
- down, increase
- up, decrease
down, decline
What is Panama's natural endowment?
Copper
In the "Lemons Problem", buyers and sellers of cars don't have equal amounts of information required to make an informed decision regarding a transaction. What is this information failure called?
Asymmetric information
When fixed costs become extremely high, it may prove impossible for more than one player to profitably serve a market, leading to:
Natural Monopoly
If your company has an income of $3,000 and you have a 30% income tax. What is the tax payable if you receive a $200 tax deduction? What is the tax payable if you receive a $200 tax credit?
Tax Deduction = ($3,000 - $200) x 30% = $840
Tax Credit = ($3,000 x 30%) - $200 = $700
What is the self-correcting mechanism that brings exports and imports to and from different countries back into balance?
Exchange rates