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Solutions for Chapter 10: Taxes: The Price of a Functioning Government

Full solutions for Explorations in Economics | 1st Edition

ISBN: 9780716701071

Solutions for Chapter 10: Taxes: The Price of a Functioning Government

Explorations in Economics was written by and is associated to the ISBN: 9780716701071. Chapter 10: Taxes: The Price of a Functioning Government includes 9 full step-by-step solutions. This textbook survival guide was created for the textbook: Explorations in Economics, edition: 1. Since 9 problems in chapter 10: Taxes: The Price of a Functioning Government have been answered, more than 2093 students have viewed full step-by-step solutions from this chapter. This expansive textbook survival guide covers the following chapters and their solutions.

Key Business Terms and definitions covered in this textbook
  • business cycle

    fluctuations in economic activity, such as employment and production

  • closed economy

    an economy that does not interact with other economies in the world

  • corrective tax

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

  • deadweight loss

    the fall in total surplus that results from a market distortion, such as a tax

  • diversification

    the reduction of risk achieved by replacing a single risk with a large number of smaller, unrelated risks

  • economics

    the study of how society manages its scarce resources economies of scale the property whereby long-run average total cost falls as the quantity of output increases

  • efficient scale

    the quantity of output that minimizes average total cost

  • elasticity

    a measure of the responsiveness of quantity demanded or quantity supplied to a change in one of its determinants

  • finance

    the field that studies how people make decisions regarding the allocation of resources over time and the handling of risk

  • fixed costs

    costs that do not vary with the quantity of output produced

  • law of supply and demand

    the claim that the price of any good adjusts to bring the quantity supplied and the quantity demanded for that good into balance

  • marginal product of labor

    the increase in the amount of output from an additional unit of labor

  • marginal tax rate

    the amount that taxes increase from an additional dollar of income

  • market power

    the ability of a single economic actor (or small group of actors) to have a substantial influence on market prices

  • monetary policy

    the setting of the money supply by policymakers in the central bank

  • substitution effect

    the change in consumption that results when a price change moves the consumer along a given indifference curve to a point with a new marginal rate of substitution

  • supply curve

    a graph of the relationship between the price of a good and the quantity supplied

  • total cost

    the market value of the inputs a firm uses in production

  • value of the marginal product

    the marginal product of an input times the price of the output

  • variable costs

    costs that vary with the quantity of output produced

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