Public Finance Test Bank

A house is an example of ______

Private goods are those for which _____

In contrast to public goods, private goods are ______

An open TV program, such the daily news, is considered ______

When consumption of a good is non-rival and non-excludable, the good is a ______

An example of a public good is ______

Education at a private university is NOT a public good because it is ______

If the consumption of Good A by one person does not decrease the consumption of Good A by another person, then the good is said to be ______

Public roads are considered ______

______ refers to that amount of social sacrifice undergone by public due to the imposition of an additional unit of tax.

The marginal cost of distributing a pure public good to an additional consumer is ______ for a given amount of the public good

____ is an economic state where resources cannot be reallocated to make one individual better off without making at least one individual worse off.

All points on the the production possibility curve are _____

An economy contains two people and two goods, apples and bananas. Person 1 likes apples and dislikes bananas (the more bananas she has, the worse off she is), and person 2 likes bananas and dislikes apples. There are 100 apples and 100 bananas available. Which allocation is pareto efficient?

Pareto efficiency is synonym to ______

Which of the following creates a negative production externality?

An external cost exists when the cost of producing a good or service _____

_____ is present whenever some economic agent’s welfare (utility or profit) includes real variables whose values are chosen by others without particular attention to the effect upon the welfare of the other agents they affect

An example of negative externality is _____

Which of the following creates a positive consumption externality?

Those who suffer from external costs do so _____, whereas those who enjoy external benefits do so at ____

External cost is synonym to ____

Which of the following is an example of an external benefit?

The market-driven approach to correcting externalities is to _____ third party costs and benefits

______ refer to a special type of externality that depends on the relative rankings of actors in a situation. Because every actor is attempting to "one up" other actors, the consequences are unintended and economically inefficient.

____ is a tax imposed that is equal in value to the negative externality. The result is that the market outcome would be reduced to the efficient amount

Carbon tax is an example of _____

The Coase theorem requires that _____

Public expenditure refers to _____ expenditures

Public expenditures are _____

Public expenditures are covered by ____

According to Keynes, public spending is required to sustain the level of ______ in an economy

In terms of public expenditures, Public Authorities Include _____ government

Public expenditures affect the _____ to work, save, and invest.

The primary aim of the government is to _____ social benefit through public expenditure

Expenditure on ______ to the poor are aimed at increasing their real income and purchasing power.

Public expenditure enables redistribution of income in favour of the _____. It improves their capacity to _____.

To address inflation, government must _____ public expenditures.

Value-added tax is an example of indirect taxes

_____ expenditures are current or consumption expenditures incurred on civil administration, defence forces, public health and education, and maintenance of government machinery.

Subsidies are example of _____ expenditures

Expenditure on infrastructure development is an example of _____ expenditures

"As the economy develops over time, the activities and functions of the government increase." This statement is related to ______.

Taxes are ______ payments

Taxes are imposed by ______

______ eventually results in inflation.

Tax on salaries is an example of ______ tax

In progressive tax, as income increase, tax rate is expected to ______

Tax could be used to restrict consumption of ______

Based on tax incidence, taxes could be classified into ______