and and other owned by and bonds, assets) firms households. proportional tax A tax whose remains constant average tax rate as the income increases or decreases. taxpayer’s income The net income of the owners of unincorporated proprietor’s firms (proprietorships and partnerships). protective tariff A designed to shield domestic producers of tariff a good or service from the competition of foreign producers. public assistance programs Government programs that pay benefits to those who are unable to earn income (because of permanent disabilities or because they have very low income and dependent children); financed by general tax revenues and viewed as public charity (rather than earned rights). public choice theory The economic analysis of government decision making, politics, and elections. public debt The total amount owed by the Federal government to the owners of government securities; equal to the sum of past government less government budget deficits budget surpluses. public good A good or service that is characterized by nonrivalry and a good or service with these characteristics nonexcludability; provided by government. public interest theory of regulation The presumption that the purpose of the regulation of an is to protect the public (consumers) industry from abuse of the power possessed by natural monopolies. Government expenditures on public capital public investments (such as roads, highways, bridges, mass-transit systems, and electric power facilities) and on (such as education, human capital training, and health). public sector The part of the economy that contains all government entities; government. public utility A firm that produces an essential good or service, has obtained from a government the right to be the sole supplier of the good or service in the area, and is regulated by that government to prevent the abuse of its monopoly power. purchasing power The amount of goods and services that a monetary unit of income can buy. The idea that exchange rates between purchasing power parity nations equate the purchasing power of various currencies. Exchange rates between any two nations adjust to reflect the pricelevel differences between the countries. pure competition A market structure in which a very large number of firms sells a into which entry is very s tandardized product, easy, in which the individual seller has no control over the product price, and in which there is no nonprice competition; a market characterized by a very large number of buyers and sellers. purely competitive labor market A in which resource market many firms compete with one another in hiring a specific kind of
and bonds, and other assets) owned by firms and households. proportional tax A tax whose average tax rate remains constant as the taxpayer’s income increases or decreases. proprietor’s income The net income of the owners of unincorporated firms (proprietorships and partnerships). protective tariff A tariff designed to shield domestic producers of a good or service from the competition of foreign producers. public assistance programs Government programs that pay benefits to those who are unable to earn income (because of permanent disabilities or because they have very low income and dependent children); financed by general tax revenues and viewed as public charity (rather than earned rights). public choice theory The economic analysis of government decision making, politics, and elections. public debt The total amount owed by the Federal government to the owners of government securities; equal to the sum of past government budget deficits less government budget surpluses. public good A good or service that is characterized by nonrivalry and nonexcludability; a good or service with these characteristics provided by government. public interest theory of regulation The presumption that the purpose of the regulation of an industry is to protect the public (consumers) from abuse of the power possessed by natural monopolies. public investments Government expenditures on public capital (such as roads, highways, bridges, mass-transit systems, and electric power facilities) and on human capital (such as education, training, and health). public sector The part of the economy that contains all government entities; government. public utility A firm that produces an essential good or service, has obtained from a government the right to be the sole supplier of the good or service in the area, and is regulated by that government to prevent the abuse of its monopoly power. purchasing power The amount of goods and services that a monetary unit of income can buy. purchasing power parity The idea that exchange rates between nations equate the purchasing power of various currencies. Exchange rates between any two nations adjust to reflect the pricelevel differences between the countries. pure competition A market structure in which a very large number of firms sells a s tandardized product, into which entry is very easy, in which the individual seller has no control over the product price, and in which there is no nonprice competition; a market characterized by a very large number of buyers and sellers. purely competitive labor market A resource market in which many firms compete with one another in hiring a specific kind of
honors_textbook_glossary.docx