Competition and Market Structures
What is the definition of "Perfect Competition?"
A market where many well-informed and independent buyers and sellers exchange identical products.
What are some reasons for immigration?
Financial opportunities, Political freedom, War and/or Civil unrest, Pulled from home country by family members/ friends
What is the definition of alternative minimum tax?
personal income tax rate that applies whenever the
amount of taxes paid falls below a designated level
What is Deficit Spending?
spending in excess of revenues collected
What is the definition of Outsourcing?
the business practice of hiring a party outside a company to perform services or create goods that were traditionally performed in-house by the company's own employees and staff.
What is an aspect of Perfect competition?
large number of buyers and sellers, identical products, buyer and seller acts independently, well-informed, free to enter/ exit the market whenever desired
What are some struggles of Immigrants?
culture, language, education, credibility/ acceptance, economic positioning, citizenship/ ability to gain meaningful employment
What where the Tax Reform in 1981?
Ronald Reagan believed taxes were too high and burdening. He lowered the tax rates.
What is the total amount borrowed from investors to finance deficit spending?
National Debt
Why do companies outsource?
Companies use outsourcing to cut labor costs, including salaries for their personnel, overhead, equipment, and technology.
What is it called when marginal revenue is equal to marginal cost?
Profit Maximization
What are some advantages of Immigrants?
willingness to change/ adopt, “brain drain” – more intelligent tend to migrate, willingness to work and produce
What are some Alternative Tax Approaches
Flat Tax, VAT (Value-Added Tax)
What is the difference between Public vs. Private Debt
public debt is different than private debt because public debt is owed to ourselves and private debt is owed to others. Repayment of private debt is more specified and detailed than repayment of public debt
What are the downsides of outsourcing?
communication between the company and outside providers can be hard, and security threats can amp up when multiple parties can access sensitive data.
What are the types of Market failures?
Inadequate Competition, Inadequate Information, Resource Immobility, Public Goods, Externalities
What are some pro-immigrant arguments?
Produce for economy, Fill jobs otherwise not filled (low labor costs, high work ethics), Strengthening of home nations by sending dollars home, Education benefits for offspring, Makes nation more “fluid” with other countries
What are the advantages of Flat Tax?
The advantage is it simplifies the tax code.
What is the impact of the National debt?
It affects the economy by transferring purchasing power, reducing economic incentives, causing a crowding-out effect, and redistributing income, Transferring Purchasing Power, Reducing Economic Incentives, Crowding Out
What is an example of Outsourcing?
(only an example) One example would be when Apple moves all their manufacturing overseas in order to cut manufacturing and labor costs
What is the Clayton Antitrust Act?
A government policy that extends government powers over monopolies.
What are some anti-immigrant arguments?
Drains from economy, “Steals” jobs from natives, Weakens nation by sending dollars out to home country, Burden of educating offspring, Not necessary for international development
What is a sin tax?
A relatively high tax designed to raise revenue and reduce consumption of socially undesirable products.
What is a balanced budget?
It is when expenditures equal revenues
What are some companies that outsource?
Apple, Microsoft, and most tech companies are some examples.