Free Enterprise

Card Set Information

Free Enterprise
2010-10-19 20:33:39
taxes scarcity choice

Taxes, economic problems, etc.
Show Answers:

  1. Income Taxes
    • Paid by anyone who earns an income by any means.
    • April 15 is the day that Income Tax filings are due in the U.S.
    • Income taxes are subject to deductions and tax credits. They are usually not paid by people under a certain income or who have special situations, such as a disability.
  2. Property Taxes
    • Paid by anyone who owns property such as land, a home, or commercial real estate
    • These taxes are often collected by the state and county to help find their budgets
    • While income taxes are subject to deductions or credits, these are often fairly rigid
    • Licensing fees on cars, recreational vehicles, and watercraft are property taxes as well
  3. Consumptive Taxes or Sales Taxes
    These are taxes on sale goods or items that are subjected to being used by either an individual or a buisness
  4. Corporate Taxes
    • All business structures pay tax on the income made in that particular business
    • Tax consequences are important when structing a buisness
  5. User Fees
    • User fees are the same for everyone
    • A fishing or hunting license is a tax
    • Toll road fees are a tax, even if they call it user fees
    • So are travel fees, marriage licenses, driver's licenses, inspection stickers (brake tags), and license plate fees
  6. Excise Tax
    • May be broadly defined as an inland tax on the production or sale of a good
    • May be narrowly defined as a tax on a good produced within the country
  7. Proportional Tax
    • A system under which the percentage of tax is taken from income, or charged to individuals, remains the same no matter how much is made or how much is spent
    • Also called a flat tax rate
    • Regressive tax
  8. Progressive Tax
    • The tax rate applied to either income or profits, or spending, that increases as income/profit, or spending increases
    • This is the tax system used in the U.S.
    • Those who make the least amount of money tend to pay the lowest percentage of their income in taxes
    • People who make larger amounts of money are taxed at a higher percentage
  9. Regressive Tax
    • A tax that tends to increase the total percenatge of income paid on those who must pay the tax
    • In contrast, those who have a higher income pay less of their total income on items taxed
    • Sales Tax
  10. Factors of Production
    • Land
    • Labor
    • Capital
    • Entrepreneurship
  11. Land
    (Factors of Production)
    natural resources

    Ex.- water, air, etc.
  12. Labor
    (Factors of Production)

    Ex.- physical, mental
  13. Capital
    (Factors of Production)
    money, tools of production

    Ex.- lawnmower, gasoline, factory
  14. Entrepreneurship
    (Factors of Production)
    the person who takes all three Factors of Production and makes a profit
  15. Three basic questions that must be answered in order to understand an economic system:
    • What gets produced?
    • How is it produced?
    • Who gets what is produced?
  16. Opportunity Cost
    that which we give up or forgo when we make a decision or choice
  17. Absolute Advantage
    When one producer can produce a good or service using fewer resources than another producer
  18. Comparitive Advantage
    When one producer can produce a good or service at a lower opportunity cost
  19. Capital Goods
    goods used to produce other goods and services
  20. Consumer Goods
    goods produced for present consumption
  21. Economic Systems
    the basic arrangements made by societies to solve the economic problem

    • Command Economies
    • Laissez-faire Economies
    • Mixed Systems