76 Questions
How are the benefits of consuming a social good different from those of consuming a private good?
Benefits of consuming social goods are 'externalized', becoming available to all
Why is it impossible to have a private justice system or a private army?
Public goods cannot be provided by the market
What defines pure public goods?
No rivalry in consumption and impossible to exclude anyone from benefits
What term is used to describe the situation where individuals benefit from a public good without paying for it?
Free rider problem
Which of the following is an example given in the text of a mixt public good?
Pay toll roads
What do governments do to tackle inefficiencies caused by positive externalities in the production or consumption of goods like education and healthcare?
Introduce subsidies
Which term refers to situations where market exchange is higher than the efficient level due to negative externalities?
Negative externality problem
Why do private corporations face challenges in providing security services, according to the text?
Free rider problem
What is the main motivation for ancient states to assume the provision of public goods?
provide services that the market is unable to do provide
Which of the following is NOT identified as a case of negative externalities in the text?
Education subsidies
'Merit goods' are referred to as goods with which characteristic?
'Social benefit'
'Undesirable goods' typically exhibit what kind of externalities?
'Negative'
'Internalizing costs' related to negative externalities involves which government action?
'Creating taxes'
What concept arises when it is inefficient to exclude consumers from partaking in benefits of certain goods?
Exclusion inefficiency dilemma
Why might individuals smartly decide not to show preferences for certain services according to the text?
To avoid paying for the public service
What is the main focus of public finance as discussed in the text?
Revenue, expenditure, and debt operations of the government
Why is government intervention necessary from an economic standpoint according to the text?
To address market failures like allocation of resources and distribution of income
What distinguishes public goods from private goods according to the text?
Public goods have non-excludability and non-rivalry, while private goods do not
In what situations does a market require government intervention according to the text?
When there are externalities affecting production or consumption
What is the main purpose of government intervention in adjusting income distribution?
To achieve fair and just income distribution
What determines the distribution of income under the market mechanism according to the text?
The value of marginal product
In the context of fiscal redistribution, what does a tax scheme combining progressive income taxation and subsidies aim to achieve?
Redistribution from high to low income households
Why does the text suggest that full employment and stability do not occur automatically in a market economy?
Because of substantial fluctuations inherent in market economies
What does fiscal policy aim to achieve in terms of economic growth and employment?
Maintaining reasonable price levels
What is the main role of government in internalizing costs related to negative externalities?
Creating taxes on polluting products
How does the theory of utility link national welfare with income distribution according to the text?
By associating welfare with equal income distribution
What is one reason stated in the text for why governments need to adjust income distribution?
To align with societal views on justice
How does the text describe the role of government in achieving full employment and price level stability?
As requiring public policy guidance
What is the primary focus when implementing fiscal redistribution policies, as mentioned in the text?
Redistributing income from high to low earners
Why does the text suggest that economic stability and full employment require government intervention?
Due to inherent market fluctuations without guidance
What term is used to describe goods that are consumed collectively and the benefits are available to all, like a nuclear shield?
Pure public goods
Why is it stated that a private corporation would not provide services like the police according to the text?
There are incentives to hide agreement with the service
Which type of goods include examples like education and basic health attention, where positive externalities exist?
Merit goods
In the context of public goods, what is meant by 'internalizing costs' related to negative externalities?
Consumers bear the whole cost involved
'Mixt public goods' are those that have non-rivalry in consumption but can exclude those who don't pay. Which of the following is an example of a mixt public good from the text?
Flowers Bridge in Valencia
What happens when negative externalities exist in the production or consumption of a good or service?
The market exchange is higher than the efficient level
'Undesirable goods' exhibit which characteristic in terms of externalities?
'Externalizing costs' occur
'Exterilised' benefits, as mentioned in the text, refer to benefits that:
Are shared among all consumers without paying for them
'Free rider problem' in economics refers to situations where individuals:
'Externalize' benefits without paying for them
'Coercive payments, taxes, in order to finance production' of public goods relate to:
'Externalizing costs'
Which of the following is an example of a coercive material payment established for a public interest purpose?
Private property transmission for social utility goals
In Spain, what distinguishes 'Impuestos' from 'Tasas' as per the text?
Impuestos consider the ability to pay, while Tasas consider the benefit principle
Which category of coercive payments involves borrowing to the State under certain circumstances?
Patriotic mandatory bonds
What distinguishes 'Tributos' from 'Sanctions' based on the text?
Tributos consider the payer's ability to pay, while Sanctions do not.
What is a Tasa defined as in the text?
A fee for services rendered under a monopoly regime by the public sector
What is the primary difference between Direct Taxes and Indirect Taxes?
Direct taxes apply to income or wealth, while indirect taxes apply to the production or consumption
What does the Benefit Principle in taxation refer to?
Taxes related to the benefit derived from government activities
How does the text define equity in taxation?
Fairness in the distribution of the tax burden
What is the main purpose of imposing a Contribución Especial as described in the text?
To finance public work or services enjoyed by special beneficiaries
According to Hugh Dalton's definition, what is a distinguishing characteristic of a tax?
'Irrespective of the exact amount of services rendered to the taxpayer'
Which principle emphasizes that taxes should be linked to an individual's ability to pay?
'Ability-to-pay Principle'
'Horizontal Equity' in taxation refers to:
'Equal treatment of equals'
'Vertical Equity' in taxation suggests:
unequal should be taxed unequally
What does a tax liability represent according to the text?
A financial burden for taxpayers
In terms of taxation, what does 'regressive' imply?
Taking a higher fraction of income from low-income people than from high-income earners
What is the most accurate description of 'tax yield' based on the text?
Total revenue derived from all taxes collected by the government
Direct taxes are advantageous because they don’t have __________ tendencies.
inflationary
Indirect taxes provide a wide tax base and hence revenue potential due to their inclusion in the price of taxable goods and services, shifting the tax incidence to the last __________.
consumer
Indirect taxes tend to be regressive especially when imposed on goods and services consumed by low income __________.
earners
Progressiveness of direct taxes may be a disincentive to hard work, and therefore discourage __________ and investment.
savings
Equity entails that taxes should be levied in such a way that they promote ______
fairness
The imposition of tax should yield the expected revenues in order to assist government forward ______
planning
Tax to be levied at the time and in the manner which is most likely to be ______ to the taxpayer
convenient
A good tax system should be ______ to changes in the Tax base
elastic
The elastic tax system yields adequate revenue for ______
activities
This criterion advocates that the taxpayer ought to know precisely the time of payment, the manner of payment, and the amount to be ______
paid
A tax system that places heavy tax burden on tax-payers long after the income is exhausted is an ______ one
inconvenient
The system that allows the payment of tax at month end, immediately after crop harvest seasons or provides for the payment of tax through such devices as PAYE or other withholding arrangement can be regarded as ______ to the tax-payers
convenient
Optimization of collection costs is called for to judge whether a tax system is ______ or not
uneconomic
What type of Tributo is a Tasa according to the text?
A charge for an individual service that is mandatory rendered or received
In Spain, what is the primary characteristic of a Contribución Especial as described in the text?
A Tributo imposed on those specially benefiting from a public work or service
What distinguishes a Contribución Especial from other Tributos based on the text?
It targets individuals who benefit from specific public works or services
Which of the following best describes the purpose of a Contribución Especial according to the text?
To finance part of the cost of a public work or service for its beneficiaries
What is the main focus of the new regulation related to bike lanes and incidents involving bike riders and pedestrians?
Enforcing mandatory helmet wearing and responsibility insurance for riders
What does the regulation related to bike lanes aim to achieve?
Reduce incidents related to bike riders and scooters
Why is there a need for higher level surveillance and new regulations regarding bike riders and scooter users?
To clearly assign responsibilities in incidents
Learn about market failure in the provision of social goods due to the presence of public goods. Understand how public goods are consumed collectively, with benefits shared among all individuals. Explore the difference between internalized benefits of private goods and externalized benefits of social goods.
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