经济学原理 Chapter 8

8
Application: The Costs of Taxation
PRINCIPLES OF
ECONOMICS
FOURTH EDITION
N. G R E G O R Y M A N K I W
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APPLICATION: THE COSTS OF TAXATION
18
2: Elasticity and DWL of a tax
ACTIVE LEARNING
Would the DWL of a tax be larger if the tax were on
A. Rice Krispies or sunscreen? B. Hotel rooms in the short run or hotel rooms in
Q
APPLICATION: THE COSTS OF TAXATION
9
ACTIVE LEARNING
Analysis of tax
A. Compute
$ 400
1:
P
350 300 250 200 150 100 50 0 0
The market for airplane tickets
CS, PS, and total surplus without a tax.
$ 400
1:
P
350 300
The market for airplane tickets
250 PS = ½ x $200 x 100 P = 200 = $10,000 150 100 total surplus = $10,000 + $10,000 50 = $20,000 0 0 25 50
S
D
Q
75 100 125
11
ACTIVE LEARNING
Answers to B
CS = ½ x $150 x 75 = $5,625 PS = $5,625 tax revenue = $100 x 75 = $7,500
$ 400
1:
P
350 300
PB = 250
A $100 tax on airplane tickets
surplus, and total surplus?
What is the deadweight loss of a tax? What factors determine the size of this deadweight
loss?
How does tax revenue depend on the size of the
P
The more elastic is supply, the larger is the DWL.
S
Size of tax
D
Q
CHAPTER 8 APPLICATION: THE COSTS OF TAXATION 15
DWL and the Elasticity of Demand
When demand is inelastic, the DWL of a tax is small.
A PB B D C E
S
PS
F
D
QT
CHAPTER 8 APPLICATION: THE COSTS OF TAXATION
QE
Q
8
About the Deadweight Loss
Because of the tax, the units between QT and QE are not sold.
S
200
PS = 150
D
100 50 0 0 25 50 75 100 125
12
total surplus = $18,750
DWL = $1,250
Q
What Determines the Size of the DWL? Which goods or services should govt tax
Elasticity measures how much buyers and
sellers respond to changes in price, and therefore determines how much the tax distorts the market outcome.
CHAPTER 8
the long run?
C. Groceries or meals at fancy restaurants?
19
ACTIVE LEARNING
Answers
2:
A. Rice Krispies or sunscreen
From Chapter 5: Rice Krispies has many more close substitutes than sunscreen, so demand for Rice Krispies is more price-elastic than demand for sunscreen.
© 2008 South-Western, a part of Cengage Learning, all rights reserved
In this chapter, look for the answers to these questions: How does a tax affect consumer surplus, producer
Recall:
The price elasticity of demand (or supply) measures how much QD (or QS) changes when P changes.
CHAPTER 8 APPLICATION: THE COSTS OF TAXATION 13
D
Q
CHAPTER 8 APPLICATION: THE COSTS OF TAXATION 17
Why Elasticity Affects the Size of DWL
A tax distorts the market outcome:
consumers buy less, producers sell less, market Q is below the surplus-maximizing Q.
PS = D + E + F Tax revenue = 0 Total surplus = CS + PS =A+B + C +D+E+F
PE
D F A B C E D S
QT
CHAPTER 8 APPLICATION: THE COSTS OF TAXATION
QE
Q
6
The Effects of a Tax
(e.g. education, roads, police) so we include it in total surplus.
CHAPTER 8
APPLICATION: THE COSTS OF TAXATION
5
The Effects of a Tax
Without a tax,
P
CS = A + B + C
7
The Effects of a Tax
P
C + E is called the deadweight loss (DWL) of the tax, the fall in total surplus that results from a market distortion, such as a tax.
to raise the revenue it needs?
One answer: those with the smallest DWL. When is the DWL small vs. large?
Turns out it depends on the price elasticities of supply and demand.
P
The value of these units to buyers is greater than the cost of producing them,
so the tax prevents some mutually beneficial trades.
CHAPTER 8
PB
S
PS
D
QT
QE
CHAPTER 8
APPLICATION: THE COSTS OF TAXATION
2
The Effects of a Tax
Eq’m with no tax: price = PE quantity = QE Eq’m with tax = $T per unit: Buyers pay PB
With the tax, CS = A PS = F Tax revenue =B+D Total surplus =A+B +D+F The tax reduces total surplus by C+E
CHAPTER 8
P
A PB B D C E
S
PS
F
D
QT
QE
Q
APPLICATION: THE COSTS OF TAXATION
DWL and the Elasticity of Supply
When supply is inelastic, the DWL of a tax is small.
P S
Size of tax
D
Q
CHAPTER 8 APPLICATION: THE COSTS OF TAXATION 14
DWL and the Elasticity of Supply
price sellers receive.
A tax reduces the quantity bought & sold.
These effects are the same whether the tax is
imposed on buyers or sellers, so we do not make this distinction in this chapter.
tax?
CHAPTER 8
APPLICATION: THE COSTS OF TAXATION
1
Review from Chapter 6:
A tax is a wedge between the price buyers pay
and the price sellers receive.
A tax raises the price buyers pay and lowers the
P
Size of tax = $T
PB S
PE PS
D
Sellers receive PS Quantity = QT
QT
CHAPTER 8 APPLICATION: THE COSTS OF TAXATION
QE
Q
3
The Effects of a Tax
P
Revenue from tax: $T x QT
B. If $100 tax
S
per ticket, compute CS, PS, tax revenue, total surplus, and DWL.
D
Q
25 50 75 100 125
10
ACTIVE LEARNING
Answers to A
CS = ½ x $200 x 100 = $10,000
PB
Size of tax = $T
S
PE PS
D
QT
CHAPTER 8 APPLICATION: THE COSTS OF TAXATION
QE
Q
4
The Effects of a Tax
Next, we apply welfare economics to measure
the gains and losses from a tax.
P S
Size of tax
D
Q
CHAPTER 8 APPLICATION: THE COSTS OF TAXATION 16
DWL and the Elasticity of Demand
P S
The more elastic is demand, the larger is the DWL.
Size of tax
We determine consumer surplus (CS),
producer surplus (PS), tax revenue, and total surplus with and without the fund beneficial services