chp 8 Flashcards
1
Q
deadweight loss
A
the fall in total surplus
2
Q
taxes have dead weightloss because…
A
buyers consume less and sellers produce less. shrinking the market below the level that maximizes total surplus
3
Q
larger elasticities imply _____ dead weight lods
A
larger
4
Q
the laffer curve
A
too little tax= not enough tax revenue. too much tax= too little tax revenue. therefore easy medium is best.
