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Unformatted text preview: The greater the elasticity of supply, the smaller is the portion of the tax paid by the seller, the greater the decrease in the equilibrium quantity, and greater the dead weight loss A tax is efficient when supply is perfectly inelastic or demand is perfectly inelastic The benefit principle is the proposition that people should pay taxes equal to the benefits they receive from the services provided by government The ability to pay principle is the proposition that people should pay taxes according to how easily they can bear the burden of the tax...
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- Summer '11