Ch. 6 - Introduction to Taxes and SubsidiesWorksheetSee all chapters
All Chapters
Ch. 1 - Introduction to Microeconomics
Ch. 2 - Introductory Economic Models
Ch. 3 - Supply and Demand
Ch. 4 - Elasticity
Ch. 5 - Consumer and Producer Surplus; Price Ceilings and Floors
Ch. 6 - Introduction to Taxes and Subsidies
Ch. 7 - Externalities
Ch. 8 - The Types of Goods
Ch. 9 - International Trade
Ch. 10 - The Costs of Production
Ch. 11 - Perfect Competition
Ch. 12 - Monopoly
Ch. 13 - Monopolistic Competition
Ch. 14 - Oligopoly
Ch. 15 - Markets for the Factors of Production
Ch. 16 - Income Inequality and Poverty
Ch. 17 - Asymmetric Information, Voting, and Public Choice
Ch. 18 - Consumer Choice and Behavioral Economics
Sections
Introducing Taxes and Tax Incidence
Effects of Taxes on a Market
Elasticity and Taxes
Subsidies
The Laffer Curve
Quantitative Analysis of Taxes
Tax Efficiency
Tax Equity
The tax incidence to the consumer and producer depend on the price elasticity of each curve.

Concept #1: Elasticity and Taxes

Concept #2: Elasticity and Taxes: Perfectly Elastic Demand and Perfectly Inelastic Demand

Practice: A $1 per-unit tax levied on consumers of a good is equivalent to

Practice: A tax imposed on consumers of a good:

Practice: Suppose that a unit tax of $2 is imposed on producers with initial equilibrium of $10. If the demand curve is vertical and the supply curve is upward-sloping, what will be the price faced by consumers after the tax?