Chapter 14: Choices, Taxes, And The Distribution Of Income

Front 1

Arrow Impossibly Theorem

Back 1

A mathematical theorem that holds that no system of voting can be devised that will consistently represent the underlying preferences of voters.

Front 2

Average Tax Rate

Back 2

Total tax paid divided by total income.

Front 3

Excess Burden

Back 3

A measure of the efficiency loss to the economy that results from a tax having reduced the quantity of a good produced; also known as the deadweight loss.

Front 4

Human Capital

Back 4

The accumulated knowledge and skills that workers acquire from formal training and education or from life experiences.

Front 5

Lorenz Curve

Back 5

A curve that shows the distribution of income by are ting incomes from lowest to highest on the horizontal axis and indicating the cumulative fraction of income earned by each fraction of households on the vertical axis.

Front 6

Marginal Tax Rate

Back 6

The fraction of each additional dollar of income that must be paid in taxes.

Front 7

Marginal Tax Rate

Back 7

The fraction of each additional dollar of income that must be paid in taxes.

Front 8

Median Voter Theorem

Back 8

The proposition that the outcome of a majority vote is likely to represent the preferences of the voter who is in the political middle.

Front 9

Marginal Tax Rate

Back 9

The fraction of each additional dollar of income that must be paid in taxes.

Front 10

Median Voter Theorem

Back 10

The proposition that the outcome of a majority vote is likely to represent the preferences of the voter who is in the political middle.

Front 11

Poverty Line

Back 11

A level of annual income equal to three times the amount of money necessary to purchase the minimum quantity of food required for adequate nutrition.

Front 12

Marginal Tax Rate

Back 12

The fraction of each additional dollar of income that must be paid in taxes.

Front 13

Median Voter Theorem

Back 13

The proposition that the outcome of a majority vote is likely to represent the preferences of the voter who is in the political middle.

Front 14

Poverty Line

Back 14

A level of annual income equal to three times the amount of money necessary to purchase the minimum quantity of food required for adequate nutrition.

Front 15

Poverty Rate

Back 15

The percentage of population that is poor according to the federal government's definition.

Front 16

Progressive Tax

Back 16

A tax for which people with lower incomes pay a lower percentage of their income in tax than do people with higher incomes.

Front 17

Progressive Tax

Back 17

A tax for which people with lower incomes pay a lower percentage of their income in tax than do people with higher incomes.

Front 18

Public Choice Model

Back 18

A model that applies economic analysis to government decision making.

Front 19

Progressive Tax

Back 19

A tax for which people with lower incomes pay a lower percentage of their income in tax than do people with higher incomes.

Front 20

Public Choice Model

Back 20

A model that applies economic analysis to government decision making.

Front 21

Regressive Tax

Back 21

A tax for which people with lower incomes pay a higher percentage of their income in tax than do people with higher incomes.

Front 22

Progressive Tax

Back 22

A tax for which people with lower incomes pay a lower percentage of their income in tax than do people with higher incomes.

Front 23

Public Choice Model

Back 23

A model that applies economic analysis to government decision making.

Front 24

Regressive Tax

Back 24

A tax for which people with lower incomes pay a higher percentage of their income in tax than do people with higher incomes.

Front 25

Rent Seeking

Back 25

Attempts by individuals and firms to use government action to make themselves better off at the expense of others.

Front 26

Progressive Tax

Back 26

A tax for which people with lower incomes pay a lower percentage of their income in tax than do people with higher incomes.

Front 27

Public Choice Model

Back 27

A model that applies economic analysis to government decision making.

Front 28

Regressive Tax

Back 28

A tax for which people with lower incomes pay a higher percentage of their income in tax than do people with higher incomes.

Front 29

Rent Seeking

Back 29

Attempts by individuals and firms to use government action to make themselves better off at the expense of others.

Front 30

Tax Incidence

Back 30

The actual division of the burden of a tax between buyers and sellers in a market.

Front 31

Progressive Tax

Back 31

A tax for which people with lower incomes pay a lower percentage of their income in tax than do people with higher incomes.

Front 32

Public Choice Model

Back 32

A model that applies economic analysis to government decision making.

Front 33

Regressive Tax

Back 33

A tax for which people with lower incomes pay a higher percentage of their income in tax than do people with higher incomes.

Front 34

Rent Seeking

Back 34

Attempts by individuals and firms to use government action to make themselves better off at the expense of others.

Front 35

Tax Incidence

Back 35

The actual division of the burden of a tax between buyers and sellers in a market.

Front 36

Voting Paradox

Back 36

The failure of majority voting to always result in consistent choices.