Taxation

    Cards (6)

    • Indirect tax
      tax on expenditure
    • ad velorum tax
      tax in proportion to price
    • unit/specific tax
      tax in proportion to volume of goods purchased
    • elastic tax burden
      • demand is elastic so consumer burden is far smaller than producer burden
      • P1 - P2 is greater than P1-P3
    • Inelastic tax burden
      • demand is inelastic so consumer burden is far greater than producer burden
      • P1-P2 is far greater than P1-P3
    • Ad Velorum taxes
      • Diverging supply curves so tax increases as Q increases
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