Chapter 8 - Application: The Costs of Taxation

Macroeconomics

________: how taxes influence the economy and how policymakers use the system to stabilize the economy.

Microeconomics

________: how to design a successful tax system while balancing equality and efficiency.

Greater elasticity

________ calls for more of an increase in tax revenue.

Welfare

________ without a tax- total surplus is the area between supply and demand up to equilibrium.

quantity of labor

When taxes are cut, people are encouraged to increase their ________.

Deadweight loss

________: the fall in total surplus that results from a market distortion, such as the tax.

Welfare

________ with a tax- total surplus is consumer surplus + producer surplus + tax revenue.