note - ch6 - Econ 251 Fall 2009 Handout 10 09/22/09 Chapter...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Econ 251 Fall 2009 Handout 10 09/22/09 1 Chapter 6 (cont’d.) – Markets in Action Taxation creates a ________________between the price _____________________ and the price ________________________ Taxation can ___________________________! Example : Tax on gasoline In equilibrium the price per gallon is $3.50 and the equilibrium quantity of gas is 30,000 gallons. Suppose the government imposes a tax of $1 per gallon on sellers. b _____________________________________________________________________ With the tax: - consumers will end up paying _______________________ - sellers get ___________________________________ Q (thousands) P
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Handout 10 09/22/09 2 Def. Tax incidence = Q: Would the tax incidence be different if the tax is imposed on buyers? A: __________________________________________________________ Q: Who bears the tax burden? Two Cases : Assume the same supply curve and also the same tax level. P
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 09/27/2009 for the course ECON 251 taught by Professor Blanchard during the Spring '08 term at Purdue University-West Lafayette.

Page1 / 5

note - ch6 - Econ 251 Fall 2009 Handout 10 09/22/09 Chapter...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online