Why Rich or Poor?
This economic principle is a key driver of income disparity between countries.
What is productivity?
When producers sell a product for more than their minimum price, this creates a benefit for the seller.
What is producer surplus?
In market-based economies, this economic principle is said to shape the structure of entire industries.
What is competition?
This type of tax is charged on what you earn from wages or salary.
What is income tax?
This term refers to the increasing flow of goods, services, and capital across national borders.
What is globalization?
When some countries have fertile land, while others have a lot of minerals. This is known as what in the study of economics?
What are natural endowments?
Ideally, the price of a product will stabilize at the market clearing price, where the most transactions occur as determined by supply and demand.
What is market equilibrium?
Markets that have many buyers and sellers, undifferentiated products, and ease of entry are known as ______.
What is a perfect market?
In a graduated income tax, this two-word term refers to the rate applied to your last dollar earned, not your overall average rate.
What is marginal tax rate?
This type of government action can limit foreign competition, often leading to trade imbalances.
What are trade barriers or tariffs?
Countries that can produce some goods cheaper and more efficiently than other goods are said to have this productivity advantage.
What is specialization or division of labor?
When companies misread the market, small shifts in prices can trigger cycles of layoffs and reduced spending. What kind of macro-market failure is this?
What are misread markets?
The advantage present when a company lowers its average cost by producing goods in larger quantities.
What are economies of scale?
Though it’s legally split between employer and employee, economists say workers bear most of this 15% levy for Social Security and Medicare.
What is payroll tax?
As U.S. union membership and lifetime employment declined, workers lost much of their _____ ______; their ability to negotiate for higher wages and benefits.
What is bargaining power?
British economist David Ricardo’s book, “The Principles of Political Economy and Taxation,” published in 1817, focuses on this economic concept.
What is comparative advantage?
The government tries to stop inflationary and deflationary spirals by doing this: pumping money into or out of the economy through the central bank.
What is monetary intervention?
A small electric vehicle startup develops battery technology that quickly replaces gasoline engines, forcing old automakers to change or shut down. What economic concept is this?
What is creative destruction?
This type of tax system reduces inequality by taxing higher earners at higher rates.
What is progressive taxation?
As the global economy expands, the share of growing income is shared amongst a small number of firms or ‘uniquely skilled’ individuals. This phenomenon is linked to this trend in the labor market.
What is the rise of income inequality/widening income gap?
The economic principle that explains why two nations with the same starting GDP per capita might see diverging incomes. For example when one country invests in schools and rule of law, and the other in bribes and bad contracts.
What are institutions?
When the price of an important product, like oil, rises with no way to increase supply, it can create an inflationary spiral; falling wages continuously can create a deflationary spiral. What kind of macro-market failure is this?
What are supply constraints?
A big fashion retailer stops owning its own factories and instead contracts smaller, specialized firms to handle production and logistics. What process is this an example of?
What is vertical disintegration?
This form of fairness means people with high incomes should pay a larger share of taxes than those with lower incomes.
What is vertical equity?
When foreign competition forces some domestic industries to shut down, economists say that globalization has caused this type of economic effect.
What is labor market distribution?