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Flashcards in Tax Incidence Deck (55)
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31

Where is community surplus found at equilibrium?

A + B + C + D + E + F + G + H

32

What is not found at equilibrium?

tax revenue or deadweight welfare loss

33

How do you see per-unit tax on graph?

distance between two supply curves P1 - P2

34

Total tax revenue

(P1 - P2) x Q1

35

Where is tax revenue found on a graph?

B + C + E + F

36

Where is the tax that comes from consumers found on a graph?

B + C

37

Where is the tax that comes from producers found on a graph?

E + F

38

Where is consumer surplus after tax found on a graph?

A

39

Where is producer surplus found on a graph?

H

40

Where is deadweight welfare loss found on a graph?

D + G

41

deadweight welfare loss

value lost to society by the introduction of tax value lost rather than transferred to another agent within society cost of inefficiency in market

42

Where is the consumer's share of deadweight welfare loss found on a graph?

D

43

Where is the producers's share of deadweight welfare loss found on a graph?

G

44

Burden when PED greater than PES

greater on producers than consumers

45

Burden when PED less than PES

greater on consumers than producers

46

Burden when PED equals PES

burden equally shared between consumers

47

Effect of inelastic PED on tax revenue, deadweight welfare loss and efficiency

greater tax revenue relatively small DWL less inefficiency caused

48

Effect of elastic PED on tax revenue, DWL and efficiency

lower tax revenue relatively large DWL more inefficiency caused

49

burden when PED = undefined (perfectly elastic)

producers have entire burden

50

burden when PED = 0 (perfectly inelastic)

consumers have entire burden

51

burden when PES = undefined (perfectly elastic)

consumers have entire burden

52

burden when PES = 0 (perfectly inelastic)

producers have entire burden

53

What is the effect of per-unit taxation on demand curve?

no effect

54

What is the supply equation given specific tax, t?

Qs = m(P-t) + A

55

What is the supply equation given ad valorem tax of x percent (given as decimal)?

Qs = m(P-Px) + A