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Unformatted text preview: • Tax alcohol and gas to reduce its consumption • Obesity taxes??? (Soda) Implication: At some tax rates, reducing taxes will increases tax revenue. Total Surplus: CS + PS + GR (Consumer Surplus, Producer Surplus, Gov’t Revenue) • Taxes cause deadweight loss o Taxes move us from the competitive equilibrium quantity. Taxes cause inefficiencies o Total surplus declines with taxes 15:20 15:20...
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This note was uploaded on 10/04/2011 for the course ECON 201 taught by Professor C.liedholm during the Spring '07 term at Michigan State University.
- Spring '07