Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
18 Cards in this Set
- Front
- Back
|
world price
|
price of good that prevails in world market
|
|
|
tariff
|
tax lon goods produced abroad, sold domestically
|
|
|
arguments for restricting trade: jobs
|
Opponents of free trade often argue that trade with other countries destroys domestic jobs.
|
|
|
arguments for restricting trade: nat'l security
|
industry is vital for national security.
|
|
|
arguments for restricting trade: infant industry
|
After a period of protection, the argument goes, these industries will mature and be able to compete with foreign firms.
|
|
|
arguments for restricting trade: bargaining
|
trade restrictions can be useful when we bargain with our trading partners.
|
|
|
arguments for restricting trade: unfair competition
|
that free trade is desirable only if all countries play by the same rules. If firms in different countries are subject to different laws and regulations, then it is unfair (the argument goes) to expect the firms to compete in the international marketplace.
|
|
|
externality
|
the uncompensated impact of one person’s actions on the well-being of a bystander
|
|
|
internalizing the externality
|
e.g. tax
|
|
|
corrective tax
|
tax designed to induce private decision makers to take account of the social costs that arise from a negative externality
|
|
|
excludability
|
the property of a good whereby a person can be prevented from using it
|
|
|
rivalry in consumption
|
the property of a good whereby one person’s use diminishes other people’s use
|
|
|
private goods
|
goods that are both excludable and rival in consumption
|
|
|
public goods
|
goods that are neither excludable nor rival in consumption
|
|
|
common resources
|
goods that are rival in consumption but not excludable
|
|
|
club goods
|
excludable but not rival in consumption
|
|
|
cost–benefit analysis
|
a study that compares the costs and benefits to society of providing a public good
|
|
|
Tragedy of the Commons
|
When one per- son uses a common resource, he or she diminishes other people’s enjoyment of it. Because of this negative externality, common resources tend to be used exces- sively. The government can solve the problem by using regulation or taxes to reduce consumption of the common resource. Alternatively, the government can sometimes turn the common resource into a private good.
|
