The impact of tax on the tax revenue.

Question

Evaluate the following two statements. Do you agree? Why or why not? a. “A tax that has no deadweight loss cannot raise any revenue for the government.” b. “A tax that raises no revenue for the government cannot have any deadweight loss.”

Answer 1

Question

Definition Definition Consumer surplus is the consumers' gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price, up to the equilibrium quantity. Producer surplus is the producer's gain from trade. The producer surplus is the area above the supply curve but below the equilibrium price, up to the equilibrium quantity. Consumer surplus is represented by Area A and producer surplus is represented by Area B.

Chapter 8, Problem 2PA

Subpart (a):

To determine

The impact of tax on the tax revenue.

Subpart (b):

To determine

The impact of tax on the tax revenue.

Expert Solution & Answer

Trending nowThis is a popular solution!

See solution

Check out sample textbook solution

Students have asked these similar questions

Evaluate the following two statements. Do you agree? Why or why not? a. “A tax that has no deadweight loss cannot raise any revenue for the government.” b. “A tax that raises no revenue for the government cannot have any deadweight loss.”

In a market without taxes, consumer surplus is $100, and producer surplus is $200. After the government enacts a tax, consumer surplus is $70, producer surplus is $150, and tax revenue is $20. What is the deadweight loss of the government intervention? Group of answer choices E. $80 A. $20 C. $50 D. $60 B. $3

If the government wants to raise tax revenue, which of the following items are good candidates for an excise tax? Choose one or more: A. toilet paper B. automobile tires C. cigarettes D. sweet potatoes

Answer 2

Question

Definition Definition Consumer surplus is the consumers' gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price, up to the equilibrium quantity. Producer surplus is the producer's gain from trade. The producer surplus is the area above the supply curve but below the equilibrium price, up to the equilibrium quantity. Consumer surplus is represented by Area A and producer surplus is represented by Area B.

Chapter 8, Problem 2PA

Subpart (a):

To determine

The impact of tax on the tax revenue.

Subpart (b):

To determine

The impact of tax on the tax revenue.

Expert Solution & Answer

Trending nowThis is a popular solution!

See solution

Check out sample textbook solution

Answer 3

Question

Definition Definition Consumer surplus is the consumers' gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price, up to the equilibrium quantity. Producer surplus is the producer's gain from trade. The producer surplus is the area above the supply curve but below the equilibrium price, up to the equilibrium quantity. Consumer surplus is represented by Area A and producer surplus is represented by Area B.

Chapter 8, Problem 2PA

Subpart (a):

To determine

The impact of tax on the tax revenue.

Subpart (b):

To determine

The impact of tax on the tax revenue.

Expert Solution & Answer

Trending nowThis is a popular solution!

See solution

Check out sample textbook solution

Answer 4

Question

Definition Definition Consumer surplus is the consumers' gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price, up to the equilibrium quantity. Producer surplus is the producer's gain from trade. The producer surplus is the area above the supply curve but below the equilibrium price, up to the equilibrium quantity. Consumer surplus is represented by Area A and producer surplus is represented by Area B.

Chapter 8, Problem 2PA

Subpart (a):

To determine