昆曼微观经济学chapter8.pptVIP

8 Application: The Costs of Taxation Learning Objectives Examine how taxes reduce consumer and producer surplus Learn the meaning and causes of the deadweight loss of a tax Consider why some taxes have larger deadweight losses than others Examine how tax revenue and deadweight loss vary with the size of a tax The Costs of Taxation Welfare economics is the study of how the allocation of resources affects economic well-being. Buyers and sellers receive benefits from taking part in the market. The equilibrium in a market maximizes the total welfare of buyers and sellers. THE DEADWEIGHT LOSS OF TAXATION How do taxes affect the economic well-being of market participants? It does not matter whether a tax on a good is levied on buyers or sellers of the good . . . the price paid by buyers rises, and the price received by sellers falls. THE DEADWEIGHT LOSS OF TAXATION A tax places a wedge between the price buyers pay and the price sellers receive. Because of this tax wedge, the quantity sold falls below the level that would be sold without a tax. The size of the market for that good shrinks. Figure 1 The Effects of a Tax How a Tax Affects Market Participants The Government: Tax Revenue T = the size of the tax Q = the quantity of the good sold T ? Q = the government’s tax revenue Figure 2 Calculating Tax Revenue How a Tax Affects Market Participants Consumers and Producers: Changes in Welfare A tax on a good reduces consumer surplus and producer surplus. Because the fall in consumer and producer surplus exceeds tax revenue, the tax is said to impose a deadweight loss. A deadweight loss is the fall in total surplus that results from a market distortion, such as a tax. Consumer and Producer Surplus before the Tax Figure 3 How a Tax Affects Welfare How a Tax Affects Welfare How a Tax Affects Market Participants The change in total welfare includes: decrease in consumer surplus, decrease in producer surplus, and increase in tax revenue. losses to buyers and sel