Macroeconomics II Week 2

Macroeconomics II Week 2 - Macroeconomics II Unit 2...

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Macroeconomics II Unit 2 Macroeconomics II Unit 2 Andrew L. Foxworth
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Macroeconomics II Unit 2 Consumer and Producer Surplus #1 1). What happens to consumer and producer surplus when the sale of a good is taxed? How does the change in consumer and producer surplus compare to tax revenue? The results of consumer and producer surplus when the sale of a good is taxed is that they both decline. Due to the change in both consumer and producer surplus tax revenue rises. This means that the two losses from taxes exceed the revenue raised by the government. Labor Taxes Question #4 4). Why do experts disagree about weather labor taxes have small or large deadweight losses? Economist disagree about weather labor taxes have small or large deadweight loss because, they have different opinions about the flexibility of labor supply. " Economist who argue that labor taxes do not greatly distort market outcomes believe that labor supply is fairly inelastic. Most people they claim would work full time regardless of the wage. If so the labor
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Macroeconomics II Week 2 - Macroeconomics II Unit 2...

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