1. Economics Review Ch. 7, 8, 9 and 10

2. What is the standard amount of pay given for work performed?
Answer: Wage rate

3. What is it called when different occupations and levels of training are rewarded with different wages?
Answer: Wage determination

4. Which branch of economics includes the study of government expenditures and government revenue?
Answer: Macroeconomics

5. What principle of taxation is the belief that people should be taxed according to what they can pay?
Answer: The Ability-to-Pay Principle

6. Which tax imposes the same % rate of taxation on everyone, regardless of income.
Answer: A proportional tax

7. Which tax imposes a higher % rate of taxation on higher incomes than on lower ones?
Answer: The Progressive Tax

8. Which tax imposes a higher % rate of taxation on low incomes than on high incomes?
Answer: The Regressive Tax

9. Answer: A proportional tax
Medicare is a federal health-care program available to all senior citizens, regardless of income. The Medicare tax is 1.45% of income, with no limit on the amount of income taxed. As a result, everyone who receives a paycheck pays exactly the same rate, regardless of the size of a paycheck. Which of the 3 taxes is this an example of?
Answer: A proportional tax

10. Which of the three taxes is the U.S. Federal income tax an example of?
Answer: The Progressive Tax

11. FICA is the Federal Insurance Contributions Act tax, which is levied on employers and employees to equally pay for what 2 things?
Answer: Pay for Social Security and Medicare. These two taxes are sometimes called payroll taxes b/c they are deducted from paychecks.

12. What is the income called that the government receives from taxation?
Answer: The $ the government receives from taxes is called revenue.

13. Who relies on revenue to receive income and to be able to conduct its day to day operations?
Answer: Federal, State and local governments

14. What is the single largest source of revenue for the federal government?
Answer: The Individual Income Tax

15. What is the IRS and what is it in charge of?
Answer: The IRS is the branch of the Treasury Department in charge of collecting taxes.

16. What is the tax called that is placed on gasoline, liquor and tobacco products?
Answer: The Excise Tax

17. What is the tax on the transfer of property when a person dies?
Answer: The Estate Tax

18. What is the tax paid by the donor on transfer of money or wealth?
Answer: The Gift Tax

19. What is the tax on imported duties?
Answer: Custom duty

20. What is the tax on corporate profits called?
Answer: The Corporate Income tax

21. This tax is levied on consumer purchases of nearly all products
This tax is levied on consumer purchases of nearly all products. Michigan’s is 6%. What is this tax called?
Answer: The Sales Tax

22. The tax on tangible and intangible possessions such as real estate, buildings, furniture, stocks, bonds, and bank accounts is called?
Answer: The Property tax

23. Another name for Government spending is???
Answer: Expenditures

24. Fiscal policy is when the government tries to manage WHAT by the manipulation of taxes?
Answer: Manage the economy

25. This occurs when the annual government spending is in excess of taxes and other revenues?
Answer: Deficit spending

26. What is the total amount borrowed from investors to finance the government’s deficit spending called?
Answer: The National Debt, which will have to paid for by future generations.

27. Which market structure has many firms in the industry and no control over the price?
Answer: Perfect Competition

28. Which market structure has a few numbers of firms in the industry and the automobile industry and cell phone industries are examples of it?
Answer: Oligopoly

29. Which market structure has many firms in the industry and has a limited influence over price. They depend on product differentiation.
Answer: Monopolistic Competition

30. Which market structure has one firm in the industry and has extensive control over the price.
Answer: Monopoly

31. What is it called when the benefits of these are available to everyone and are paid for collectively?
Answer: Public Goods

32. What is the economic side effect that affects an uninvolved third party and can be either positive or negative?
Answer: Externalities

33. What did the Sherman Anti-Trust Act discourage?
Answer: Monopolies

34. Who provides the public goods in the United States?
Answer: The Government

35. What is one of the three reasons why the government takes part in the U.S. economy?
Answer:
1 – Prevent monopolies and unfair business practices.
2 – Regulate industries in which monopolies serve the public good.
3 – Protect the public from false claims and harmful products.