Chapter 8: The Costs of Taxation Flashcards
1
Q
Dead weight loss is
A
a measure of economic inefficiency and a decrease in TS
2
Q
Tax revenue is calculated by:
A
tax size x quantity of tax
3
Q
tax _______ TS
A
reduces
4
Q
if demand and supply are both inelastic it means there was
A
a small decrease in quantity supplied and demanded (dead weight loss is small)
5
Q
if demand and supply are both elastic its means there was
A
a large decrease in quantity supplied and demanded (dead weight loss is large)
6
Q
increase in tax size = _________ in tax revenue
A
increase
7
Q
decrease in tax size= __________ in tax revenue
A
decrease
8
Q
a Laffeur Curve depicts
A
the relationship between tax size and tax revenue
9
Q
decrease in income tax= decrease in..
A
income tax revenue
10
Q
small increase in labor supply= small increase in
A
income tax revenue
