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| A model that applies economic analysis to government decision making. |
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| The failure of majority voting to always result in consistent choices. |
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| Arrow impossiblity theorem |
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| A mathematical theorem that holds that no system of voting can be devised that will consistently represent the underlying preference of voters. |
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| The proposition that the outcome of a majority vote is likely to represent the preferences of the voter who is in the political middle. |
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| The attempts by individuals and firms to use government action to make themselves better off at the expense of others. |
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| A tax for which people with lower incomes pay a higher percentage of their income in tax than do people with higher incomes. |
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| A tax for which people with lower incomes pay a lower percentage of their income in tax than do people with higher incomes. |
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| The fraction of each additional dollar of income that must be paid in taxes. |
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| Total tax paid divided by total income. |
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| The efficiency loss to the economy that results from a tax causing a reduction in the quantity of a good produced; also known as the deadweight loss. |
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| A level of annual income equal to three times the amount of money necessary to puchase the minimal quantity of food required for adequate nutrition. |
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| The percentage of the population that is poor according to the federal government's definition. |
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| A curve that shows the distribution of income by arraying incomes from lowest to highest on the horizontal axis and indicating the cumulative fraction of income earned by each fraction of households on the vertical axis. |
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