Solutions for Chapter 13: Economic Challenges

Full solutions for Contemporary Economics | 2nd Edition

ISBN: 9780538444958

Solutions for Chapter 13: Economic Challenges

Solutions for Chapter 13
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Textbook: Contemporary Economics
Edition: 2
Author: William A. McEachern
ISBN: 9780538444958

Contemporary Economics was written by and is associated to the ISBN: 9780538444958. Chapter 13: Economic Challenges includes 36 full step-by-step solutions. This expansive textbook survival guide covers the following chapters and their solutions. Since 36 problems in chapter 13: Economic Challenges have been answered, more than 2337 students have viewed full step-by-step solutions from this chapter. This textbook survival guide was created for the textbook: Contemporary Economics, edition: 2.

Key Business Terms and definitions covered in this textbook
  • Coase theorem

    the proposition that if private parties can bargain without cost over the allocation of resources, they can solve the problem of externalities on their own

  • collective bargaining

    the process by which unions and firms agree on the terms of employment

  • competitive market

    a market with many buyers and sellers trading identical products so that each buyer and seller is a price taker

  • consumer surplus

    the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it

  • corrective tax

    a tax designed to induce private decision makers to take account of the social costs that arise from a negative externality

  • discouraged workers

    individuals who would like to work but have given up looking for a job

  • exports

    goods produced domestically and sold abroad

  • frictional unemployment

    unemployment that results because it takes time for workers to search for the jobs that best suit their tastes and skills

  • in-kind transfers

    transfers to the poor given in the form of goods and services rather than cash

  • inflation rate

    the percentage change in the price index from the preceding period

  • inflation tax

    the revenue the government raises by creating money

  • marginal revenue

    the change in total revenue from an additional unit sold

  • maximin criterion

    the claim that the government should aim to maximize the well-being of the worst-off person in society

  • median voter theorem

    a mathematical result showing that if voters are choosing a point along a line and each voter wants the point closest to his most preferred point, then majority rule will pick the most preferred point of the median voter

  • natural monopoly

    a monopoly that arises because a single firm can supply a good or service to an entire market at a smaller cost than could two or more firms

  • principal

    a person for whom another person, called the agent, is performing some act

  • progressive tax

    a tax for which highincome taxpayers pay a larger fraction of their income than do low-income taxpayers

  • proportional tax

    a tax for which highincome and low-income taxpayers pay the same fraction of income

  • risk aversion

    a dislike of uncertainty

  • surplus

    a situation in which quantity supplied is greater than quantity demanded

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