Chapter 5: Public Goods and Externalities

Typically public goods are characterized by:

A tax of $3 on $200 of income, and $2 on $300 of income is

Which of the following is most likely a public good

Taxing negative externalities

Sales tax is...

When the average tax rate decreases as income increases, the tax is

Toll roads are consistent with

If something creates positive externalities and private benefits, it should be

In taxation, the rationale for the ability-to-pay principle asserts that:

When production creates negative externalities, the private market produces

When production creates external costs greater than external benefits

Two basic tax principles are

If there are positive externalities

One person buys a good, it is not available for purchse someone else. This is called:

An average tax rate that increases as income increases is

When demand and supply do not accurately reflect all the benefits and all the costs of production.

Which activity most likely has a negative externality?

When there is a positive externality, the gov might intervene by

Rivalry and excludability are characteristics of

Market failure occurs when: