Taxes - Princeton High School
... Taxes are evaluated along two lines: whether they are fair and whether the same amount of money could be raised with less harm to the economy. ...
... Taxes are evaluated along two lines: whether they are fair and whether the same amount of money could be raised with less harm to the economy. ...
Practice Questions_Ch6 - U of L Class Index
... 7. Refer to the graph above. Initial market equilibrium is at the intersection of D and S0. When government imposes a per unit tax, supply shifts from S0 to S1. The effect of this tax is to A) raise the price consumers pay from C to B. B) raise the price consumers pay from C to A. C) raise the equil ...
... 7. Refer to the graph above. Initial market equilibrium is at the intersection of D and S0. When government imposes a per unit tax, supply shifts from S0 to S1. The effect of this tax is to A) raise the price consumers pay from C to B. B) raise the price consumers pay from C to A. C) raise the equil ...
Supply Review
... result when the supply of capital does not increase with the work force, such as when there are not enough machines or tools or supplies for added workers to use. ...
... result when the supply of capital does not increase with the work force, such as when there are not enough machines or tools or supplies for added workers to use. ...
Excess burden
... • Lump sum tax is a tax that must be paid regardless of the taxpayer’s behavior. • Budget constraint HI satisfies this. Revenue yield exactly equals the equivalent variation. – Conclusion: Lump sum tax has no excess burden. ...
... • Lump sum tax is a tax that must be paid regardless of the taxpayer’s behavior. • Budget constraint HI satisfies this. Revenue yield exactly equals the equivalent variation. – Conclusion: Lump sum tax has no excess burden. ...
3. Profit Under a Monopoly Under a monopoly a producer has full
... Determine the producer’s optimum production level x , total profit, and unit price if the government chooses to maximize tax revenue. 9. Repeat the analysis of the case study in Example 2 when C(x) = C 0 + qx , the demand curve is p = a − bxm , m positive, and unit tax is t (dollars). Show that maxi ...
... Determine the producer’s optimum production level x , total profit, and unit price if the government chooses to maximize tax revenue. 9. Repeat the analysis of the case study in Example 2 when C(x) = C 0 + qx , the demand curve is p = a − bxm , m positive, and unit tax is t (dollars). Show that maxi ...
Chapter Eight Study Guide - Liberty Union High School District
... 18._______Deadweight loss is the reduction in consumer surplus that results from a tax. 19._______When a tax is placed on a good, the revenue the government collects is exactly equal to the loss of consumer and producer surplus from the tax. 20._______If John values having his hair cut at $20.00 and ...
... 18._______Deadweight loss is the reduction in consumer surplus that results from a tax. 19._______When a tax is placed on a good, the revenue the government collects is exactly equal to the loss of consumer and producer surplus from the tax. 20._______If John values having his hair cut at $20.00 and ...
Solution
... for the tax. Here the buyers can only respond to this tax by buying less at the higher price and sellers cutting high cost output if the net price after tax falls. But now Ptb and Pts are different: Pts= Ptb – tax. The sellers receive less than the buyers pay. (The tax will only shift the demand cur ...
... for the tax. Here the buyers can only respond to this tax by buying less at the higher price and sellers cutting high cost output if the net price after tax falls. But now Ptb and Pts are different: Pts= Ptb – tax. The sellers receive less than the buyers pay. (The tax will only shift the demand cur ...
Document
... Now we can work out the cost to the economy of displacing $50 worth of private consumption and $50 worth of private investment: • the loss of $50 worth of private consumption costs $50 • the $50 worth of private investment would have yielded an annual before-tax return of $50r*. The present value o ...
... Now we can work out the cost to the economy of displacing $50 worth of private consumption and $50 worth of private investment: • the loss of $50 worth of private consumption costs $50 • the $50 worth of private investment would have yielded an annual before-tax return of $50r*. The present value o ...
NBER WORKING PAPER SERIES INFLATION, TARIFFS AND TAX ENFORCEMENT COSTS
... Financial support by the Graduate School of Business, University of Chicago, is gratefully acknowledged. The research reported here is part of the NBER's research program in International Studies and project in Goverment Budget. Any opinions expressed are those of the author and not those of the Nat ...
... Financial support by the Graduate School of Business, University of Chicago, is gratefully acknowledged. The research reported here is part of the NBER's research program in International Studies and project in Goverment Budget. Any opinions expressed are those of the author and not those of the Nat ...
Principles of Economics I week 4 – chapters 7,8 and 12
... • Social planner’s problem: how to allocate resources such that welfare is maximized? – How to know how much individuals really value a good? ...
... • Social planner’s problem: how to allocate resources such that welfare is maximized? – How to know how much individuals really value a good? ...
Microeconomic Theory
... consumer is lower (P2 instead of P1). MBE The total price including the subsidy paid by the government, however, P2 +A is higher. Q1 Q2 ...
... consumer is lower (P2 instead of P1). MBE The total price including the subsidy paid by the government, however, P2 +A is higher. Q1 Q2 ...
Microeconomic Theory
... consumer is lower (P2 instead of P1). MBE The total price including the subsidy paid by the government, however, P2 +A is higher. Q1 Q2 ...
... consumer is lower (P2 instead of P1). MBE The total price including the subsidy paid by the government, however, P2 +A is higher. Q1 Q2 ...
Example one: Fat Tax
... Discussing other governmental/social benefits brought about by the measure: - The overweight population has a negative impact not only on personal health but on society as a whole, e.g. rising medical costs. The levying of the Fat Tax increases the private marginal costs of the manufacturers. If th ...
... Discussing other governmental/social benefits brought about by the measure: - The overweight population has a negative impact not only on personal health but on society as a whole, e.g. rising medical costs. The levying of the Fat Tax increases the private marginal costs of the manufacturers. If th ...
Supply Review
... result when the supply of capital does not increase with the work force, such as when there are not enough machines or tools or supplies for added workers to use. ...
... result when the supply of capital does not increase with the work force, such as when there are not enough machines or tools or supplies for added workers to use. ...
Public goods
... The charcoal company’s marginal cost will be MSC, and it will produce q’. The charcoal company will sell the remaining air use rights to the eyeglass maker for a fee of some amount between AEC (the lost profits of producing q’ rather than q*) and ABEC (the maximum amount the eyeglass maker would be ...
... The charcoal company’s marginal cost will be MSC, and it will produce q’. The charcoal company will sell the remaining air use rights to the eyeglass maker for a fee of some amount between AEC (the lost profits of producing q’ rather than q*) and ABEC (the maximum amount the eyeglass maker would be ...
P - Manhattan College
... • By “market outcomes,” we mean the impact of policy on price and quantity-our model’s representation of “truth.” • Does the policy have different outcomes if it affects consumer rather than producers or demand rather than supply • We look at the incidence of the tax. By that we mean who bears the b ...
... • By “market outcomes,” we mean the impact of policy on price and quantity-our model’s representation of “truth.” • Does the policy have different outcomes if it affects consumer rather than producers or demand rather than supply • We look at the incidence of the tax. By that we mean who bears the b ...
Microeconomics: Review
... • Demand for a normal good is positively related to income. – An increase in income causes increase in quantity demanded at each price, shifting the D curve to the right. (Demand for an inferior good is negatively related to income. An increase in income shifts D curves for inferior goods to the ...
... • Demand for a normal good is positively related to income. – An increase in income causes increase in quantity demanded at each price, shifting the D curve to the right. (Demand for an inferior good is negatively related to income. An increase in income shifts D curves for inferior goods to the ...
Chapter 15
... Use the no-tax demand and supply curve to measure aggregate surplus in the absence of a tax The tax reduces the amount bought and sold to the quantity at which the distance between the supply and demand curves is T Since quantity bought and sold is higher without the tax, so is aggregate surplus ...
... Use the no-tax demand and supply curve to measure aggregate surplus in the absence of a tax The tax reduces the amount bought and sold to the quantity at which the distance between the supply and demand curves is T Since quantity bought and sold is higher without the tax, so is aggregate surplus ...
File - MCNEIL ECONOMICS
... Governments sometimes use cost-benefit analysis to determine if they should undertake some specific action or project. This analysis requires the government to estimate the marginal costs and the marginal benefits of the project, and it can be used to decide when such projects should be expanded, co ...
... Governments sometimes use cost-benefit analysis to determine if they should undertake some specific action or project. This analysis requires the government to estimate the marginal costs and the marginal benefits of the project, and it can be used to decide when such projects should be expanded, co ...
Final Exam Answers
... or reduces the saving rate depends on the interest elasticity of saving. Theory says that the interest elasticity could be positive or negative, so we don’t know whether reducing taxation on interest will increase or reduce the saving rate. 8. Because monopoly profits are simply an income distributio ...
... or reduces the saving rate depends on the interest elasticity of saving. Theory says that the interest elasticity could be positive or negative, so we don’t know whether reducing taxation on interest will increase or reduce the saving rate. 8. Because monopoly profits are simply an income distributio ...
Answers to Homework #4
... Assume the market demand curve is Pd = 900 – 2Qd. a. What is the new long-run equilibrium price with the tax from a consumer’s perspective and from the firms’ perspective? (Think about this one for a minute before diving into the calculations.) The price from the firms’ perspective is P = 8. Once ag ...
... Assume the market demand curve is Pd = 900 – 2Qd. a. What is the new long-run equilibrium price with the tax from a consumer’s perspective and from the firms’ perspective? (Think about this one for a minute before diving into the calculations.) The price from the firms’ perspective is P = 8. Once ag ...
Indirect taxes
... In what sense are we morally obliged to pay taxes? Is this the result of a promise that we have made ourselves? When was this promise made? (Make a distinction here between moral and legal ...
... In what sense are we morally obliged to pay taxes? Is this the result of a promise that we have made ourselves? When was this promise made? (Make a distinction here between moral and legal ...
Ch06 Govt actions in markets
... B) long waiting lists of potential suppliers for rent-controlled housing C) a surplus of housing D) no search activity E) Both A and B are correct. ...
... B) long waiting lists of potential suppliers for rent-controlled housing C) a surplus of housing D) no search activity E) Both A and B are correct. ...
Market Failure Stakeholder Analysis (Who Wins, Loses) Monopoly
... Measuring both usually leads to double counting (since primary markets tend to show all effects) Don’t forget that benefit changes are a function of price changes 12-706 and 73-359 ...
... Measuring both usually leads to double counting (since primary markets tend to show all effects) Don’t forget that benefit changes are a function of price changes 12-706 and 73-359 ...
Pigovian tax
A Pigovian tax (also spelled Pigouvian tax) is a tax applied to a market activity that is generating negative externalities (costs for someone other than the person on whom the tax is imposed). The tax is intended to correct an inefficient market outcome, and does so by being set equal to the social cost of the negative externalities. In the presence of negative externalities, the social cost of a market activity is not covered by the private cost of the activity. In such a case, the market outcome is not efficient and may lead to over-consumption of the product. An often-cited example of such an externality is environmental pollution.In the presence of positive externalities, i.e., public benefits from a market activity, those who receive the benefit do not pay for it and the market may under-supply the product. Similar logic suggests the creation of a Pigovian subsidy to make the users pay for the extra benefit and spur more production. An example sometimes cited is a subsidy for provision of flu vaccine.Pigovian taxes are named after economist Arthur Pigou who also developed the concept of economic externalities. William Baumol was instrumental in framing Pigou's work in modern economics.