Assignment 5 Update (Ch. 7 & 8, LS 5 & 16)

Question	Answer
Directing financial assistance because of underproduction leads to	a decrease in price and an increase in quantity supplied
market failure is the result of goods that have	non rival and non excludable characteristics and goods that have external effects
a public good is	non rival and non excludable
the us border patrol. public or private good?	public
satellite tv. public or private good?	private
When negative externalities exist	equilibrium output will be greater than efficient output
The government could correct the difference between the equilibrium output level and the efficient output level by	using a regulation that requires firms to internalize the external costs.
Correction for a negative externality	tax
correction for a positive externality	subsidy
The personal income tax is the most important source of revenue at	The federal level
A progressive tax is one in which	the average rate increases as income increases
A regressive tax is one in which	the average rate decreases as income increases
A proportional tax is one in which	the average rate is constant as income increases
a 4 percent general sales tax is	regressive and the incident is on the consumer
the efficiency loss of a tax is the net benefit society gives up because	too little of a product is produced
Does a progressive tax system by itself guarantee that resources will be redistributed from the rich to the poor?	no

Resource summary

	Created by casedlynch almost 10 years ago