Microeconomics Chapter 6: Taxes and Subsidies

escape

elasticity = ____

same

exactly the ___ effect whether paid for by sellers or buyers

subsidy

a ___ is a reverse tax where the government gives money to consumers or producers

reverse

a subsidy is a ____ tax

raises

commodity taxation _____ revenue and creates lost gains from trade

total surplus

consumer surplus + producer surplus = ____ ____

elastic

deadweight losses are larger the more ____ the demand curve

increases

subsidies must be paid by taxpayers and they create inefficient ___ in trade (deadweight loss)

tax payers

subsidies must be paid for by ___ ____ and they create inefficient increases in trade (DWL)

received, paid

subsidy = price ___ by sellers - price ___ by buyers

tax revenue

tax * quantity supplied

paid, recieved

tax = price ___ by consumers - price ____ by sellers

demanded

tax buyers for every x ____

commodity tax

tax on goods

supplied

tax sellers for every x ____

decrease

taxes ___ gains from trade

greater

the less elastic side of the market will pay the ___ share of a tax

burden

those who bear the ___ of a tax receive the benefit of subsidy

deadweight loss

total of lost consumer surplus and producer surplus when all mutually profitable gains from trade are exploited

less

when demand is more elastic than supply, demanders pay ___ of the tax than sellers

supply, demand

when speaking of labor, employees = _____ and employers = _____

pays

who ___ a tax does not depend on who must send the check to the government

pays

who ___ the tax does not depend on who writes the check to the government

benefits

who ____ from a subsidy does depend on the relative elasticities of demand and supply

does

who benefits from a subsidy ____ depend on the relative elasticities of demand and supply

not

who gets a subsidy does ____ depend on who gets the check from the government

receives

who gets the subsidy does not depend on who ____ the check from the government

elasticities

who pays the tax depends on the relative ____ of demand and supply

greater

with a subsidy, the price paid to sellers is ___ than the price paid by consumers