Public Economics Flashcards
(108 cards)
1
Q
Definition of Public Economics
A
2
Q
4 questions of PE
A
3
Q
when should the gov intervene in the economy (in general)?
A
4
Q
Define externalties
A
5
Q
Define imperfect competition
A
6
Q
Define asymmetric information
A
7
Q
what are the functions of taxation?
A
8
Q
types of taxation?
A
9
Q
5 desirable characteristics of taxation
A
10
Q
define deadweight loss in taxation
A
11
Q
3 rules of tax incidence
A
12
Q
general equilibrium vs partial equilibrium in taxation: meaning
A
13
Q
tax fairness: define
A
14
Q
redistribution definition
A
15
Q
optimal commodity taxation (Ramsey’s rule) + equity implications
A
16
Q
optimal income taxation
A
17
Q
define marginal tax rate
A
18
Q
define average tax rate
A
19
Q
define horizontal and vertical equity of taxation
A
20
Q
equation consumer’s tax burden
A
21
Q
equation producer’s tax burden
A
22
Q
Income definition
A
23
Q
Wealth definition
A
24
Q
VAT taxes definition
A
25
Excise taxes definition
26
Taxable income definition
27
3 effects of general equilibrium taxation
28
define progressive/proportional/regressive tax systems
29
3 phases of taxation in developing countries
30
1st phase of taxation in developing countries: goals, policies and results + characteristics of dev. countries that influenced ability to collect taxes
31
2nd phase of taxation in developing countries (Washington Consensus): goals, policies + flat tax, results
32
Flat tax in Russia
33
Taxation in Latin America after 2000 + case of Uruguay: policies and results
34
define capital
35
what is capital gains tax?
a tax levied on capital gains or profits from the sale of specific types of assets.
36
what is the global wealth tax?
37
what is the tax on corporate income?
38
Arguments in favour of the Flat Tax
39
Explain graph Deadweight loss in taxation
40
Explain graph substitution effect in taxation
41
Explain graph income effect in taxation
42
Define social security
43
Define social insurance
44
Define self insurance
Private means of smoothing consumption
45
Why people buy insurance?
46
Define consumption smoothing
47
Define health insurance
48
Why does the government intervene in insurance?
49
Define asymmetric information in insurance
50
Define adverse selection in insurance
51
Define moral hazard in insurance
52
What is the poverty trap? + s-shaped curve
53
What is the expected utility model in insurance?
the weighted sum of utilities across different states of the world, where weights are the probabilities of each state occurring.
54
Define risk aversion
55
Define risk premium
the amount that risk-averse individuals will pay for insurance above and beyond the actuarially fair price.
56
pooling equilibrium vs. separating equilibrium in insurance
57
How to measure the importance of social insurance vs. self insurance for consumption smoothing?
58
the 4 lessons for optimal social insurance
59
Remedy for adverse selection?
60
Remedy for moral hazard?
61
Define social protection (+ 2 categories of social protection)
62
Define means tested transfer program + graph (effects on individuals' labor supply decisions)
63
3 costs of welfare policy
64
What is the moral hazard in the context of welfare policy?
65
define categorical welfare program
66
what is the Benefit reduction rate?
67
define welfare state
The welfare state is a way of governing in which the state or an established group of social institutions provides basic economic security for its citizens. By definition, in a welfare state, the government is responsible for the individual and social welfare of its citizens.
68
define the degree of decommodification
69
define the 3 regimes of welfare
70
Cash welfare and in kind programs in USA
71
Conditional cash transfers in Latin America
72
Chile solidario
73
Non-contributory pension programs in Africa
74
What is Universal Basic Income?
75
Define individual failure
76
How can the government intervene in the economy (in general)?
77
WHAT are the effects of government intervention in the economy?
78
WHAT are the DIRECT effects of government intervention in the economy?
79
WHAT are the INDIRECT effects of government intervention in the economy?
80
What is welfare economics?
81
What is social efficiency?
total social surplus (Consumer’s surplus + Producer’s surplus). Net benefits that consumers and producers received as a result of their trades of goods and services.
82
What is social welfare?
83
How do consumers choose?
84
Define budget constraint + explain the graph
85
Define: utility, marginal utility, law of diminishing marginal utility
86
How changes in income affect consumer's choices?
87
How changes in price affect consumer's choices?
88
Define demand curve
89
Define supply curve
90
Define market equilibrium
91
Define deadweight loss (in general)
92
What are the 2 welfare Theorems?
93
Define Pareto efficiency
94
Define consumer's surplus
economic measurement of consumer benefits resulting from market competition. A consumer surplus happens when the price that consumers pay for a product or service is less than the price they're willing to pay.
95
Define producer's surplus
96
Why should the government intervene in education?
Positive externalities: increased productivity, more civic engagement (improved democracy); less crime; helps social mobility (redistribution)
97
What if government provides public education (graph)?
98
Explain positive/negative consumption/production externalities (graphs)
99
Explain the Coase Theorem
under the right conditions parties to a dispute over property rights will be able to negotiate an economically optimal solution, regardless of the initial distribution of the property rights.
99
Remedies to externalities?
100
What is a Pigouvian tax? Graph
101
Define public goods
101
Define non-rivalry and non-excludability
102
What are the problems with public goods?
103
Define the free rider problem
104
Define the tragedy of the commons
105
2 remedies for problems linked to public goods
106
Explain Laffer curve
