This is for Chapter 3 of A2:
1. Contracting out: The transfer of
responsibility for the provision of a service from the public sector to the
private sector
2. Deadweight loss: The fall in
consumer surplus when a monopoly firm reduces output and raises price compared
to what the situation would be in perfect competition thereby causing a welfare
loss to the consumers
3. Deregulation: The process of
removing or reducing state regulations which will then reduce the compliance
costs
4. Income inequality: The extent to
which income is distributed in an uneven manner among a population
5. Means-tested benefits: Benefits that
are available only to individuals whose income is below a certain level
6. Monopoly: A market structure which
is dominated by a single firm/ Legally a firm that owns more than 25% of the
market share (monopoly and oligopoly can co-exist)
7. Natural monopoly: A situation in
which the most efficient number of firm in an industry is one
8. Nationalisation: The transfer of
ownership of an industry from the private sector to public sector
9. Negative income tax: The payment of
money to those people on low incomes instead of taking part of their income through
income tax
10. Poverty trap: A situation where a
person does not have any incentive to look for better paying jobs because this
would lead to higher income tax and lower benefits which will make them overall
worse off than before
11. Privatisation: The transfer of
ownership of an industry from the state or public sector to the private sector
12. Progressive tax: Taxing mechanism in
which the government charges higher taxes as the level of income increases
13. Regressive tax: Taxing mechanism
which takes a larger percentage of income from the poor rather than rich
14. Supply-side economics: The approach
to change in an economy that puts the focus on the supply side rather than the
demand side, such as improvement in education and training, privatisation,
deregulation and lowering of tax
15. Tax credit: A sum that can be offset
against the tax liability
16. Universal benefits: Benefits that
are provided to everyone who is entitled to them without taking into account
the income of those people
17. Unemployment trap: A situation where
an unemployed person does not have any incentive at all to look for jobs
because of the generous benefits given
18. Wealth inequality: The extent to
which financial assets are unequally distributed among a population
19. X-inefficiency: A situation where
average costs (AC) is not at its lowest point because monopoly power has given
rise to inefficiency
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