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Economics
Chapters 5, 13, 19 & 20
33
Economics
Undergraduate 2
07/27/2009

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Term
Economic Efficiency
Definition
a situation in which no one in society can be made better off w/o making someone else worse off
Term
Technical Efficiency
Definition
producing at a point on the PPC
Term
Market Imperfections
Definition
a lack of efficiency that results from imperfect info. into the market place
Term
Externalities
Definition
costs or benefits of a transaction that are borne by someone who is not directly involved in the transaction
Term
Public Goods
Definition
a good whose consumption by one person does not diminish the quantity or quality available for others
Term
Private Property Rights
Definition
the right of ownership
Term
Free Ride
Definition
the enjoyment of the benefits of a good by a producer or consumer w/o having to pay for the good
Term
Monopoly
Definition
a situation in which there is only one producer of a good
Term
Rent Seeking
Definition
use of resources simply to transfer wealth from one group of people to another w/o increasing production or total wealth
Term
Public Choice
Definition
study of how gov't actions result from the self-interested behaviors of voters and politicians
Term
Gov't provides public goods to
Definition
prevent the free rider problem that would occur if private firms provided the goods
Term
Gov't taxed or subsidizes some activities that
Definition
create externalities
Term
Sherman Antitrust Act
Definition

1. out laws contracts and conspiricies in restraint of trade

2. forbids monopolization and attempts to monopolize

Term

Herfindahl Index

Highly Competitive

Definition
below 1000
Term

Herfindahl Index

Moderately Competitive

Definition
1000 & 1800
Term

Herfindahl Index

Highly Concentrated

Definition
above 1800
Term
Economic Regulation
Definition
prescription of price and output for a specific industry
Term
Social Regulation
Definition
the prescribing of health, safety, performance, and environmental standards that apply across several industries
Term
Fair Rate of Return
Definition
a price that allows a monopoly firm to earn a normal profit
Term
Standard Assets
Definition
assets aquired by a firm when it was regulated that have little value when the firm is deregulated
Term
Privitalization
Definition
transferring a publicaly owned enterprise to private ownership
Term
Contracting Out
Definition
process of enlisting a private firm to provide a product or service for a gov't entity
Term

Privatization

Wholesale

Definition
publicaly owned firm is transferred to private ownership
Term

Privatization

Contracting Out

Definition
specific aspect of a gov't operation is carried out by a private firm
Term

Privatization

Auctioning

Definition
rights to operate a gov't enterprise go to the highest private-sector bidder
Term
Medicare
Definition
a federal health-care program for the elderly and the disabled
Term
Medicaid
Definition
a joint federal state program that pays for health care for poor families, the neediest elderly, and the disabled
Term
Lorenz Curve
Definition
a curve measuring the degree of inequality of income
Term
Cash Transfers
Definition
money allocated away from one group in society to another
Term
In-Kind Transfers
Definition

the allocations of goods and services from one group in society to another

(non-cash)

Term
Progressive Tax
Definition

a tax whose rate increases as income increases

(income tax)

Term
Proportional Tax
Definition

a tax whose rate does not change as the base changes

(sales tax)

Term
Regressive Tax
Definition

a tax whose rate decreases as the tax base increases

(lower level)

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