宏觀經(jīng)濟(jì)學(xué)原理 第五版 英文原版課件macro-ch08-presentation

1、Application: The Costs of TaxationMacroeonomicsP R I N C I P L E S O FN. Gregory MankiwPremium PowerPoint Slides by Ron Cronovich8In this chapter, look for the answers to these questions:How does a tax affect consumer surplus, producer surplus, and total surplus? What is the deadweight loss of a tax

2、? What factors determine the size of this deadweight loss? How does tax revenue depend on the size of the tax? 11Review from Chapter 6A tax drives a wedge between the price buyers pay and the price sellers receive. raises the price buyers pay and lowers the price sellers receive. reduces the quantit

3、y 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. 2QTThe Effects of a TaxPQDSEqm with no tax: Price = PE Quantity = QE PSPBPEQEEqm with tax = $T per unit:Sellers receive PS Quantity = QT Buyers pay PB Size

4、 of tax = $T3The Effects of a TaxPQDSRevenue from tax: $T x QT PSPBPEQEQTSize of tax = $T4The Effects of a TaxNext, we apply welfare economics to measure the gains and losses from a tax. We determine consumer surplus (CS), producer surplus (PS), tax revenue, and total surplus with and without the ta

5、x. Tax revenue can fund beneficial services (e.g., education, roads, police) so we include it in total surplus.5The Effects of a TaxPQDSWithout a tax, PEQEQTABCDEFCS = A + B + CPS = D + E + FTax revenue = 0Total surplus= CS + PS= A + B + C + D + E + F6The Effects of a TaxPQDSPSPBQEQTABCDEFCS = APS =

6、 FTax revenue = B + DTotal surplus= A + B + D + FWith the tax, The tax reduces total surplus by C + E7The Effects of a TaxPQDSPSPBQEQTABCDEFC + 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. 8About the Deadweight Loss

7、PQDSPSPBQEQTBecause of the tax, the units between QT and QE are not sold. The value of these units to buyers is greater than the cost of producing them,so the tax prevents some mutually beneficial trades. 9A C T I V E L E A R N I N G 1 Analysis of tax10A.Compute CS, PS, and total surplus without a t

8、ax. B.If $100 tax per ticket, compute CS, PS, tax revenue, total surplus, and DWL.DSPQ$The market for airplane tickets10A C T I V E L E A R N I N G 1 Answers to A11DSCS = x $200 x 100= $10,000PQ$Total surplus= $10,000 + $10,000= $20,000PS = x $200 x 100= $10,000P =The market for airplane tickets11A

9、C T I V E L E A R N I N G 1 Answers to B12DSCS = x $150 x 75= $5,625PQ$Total surplus = $18,750PS = $5,625Tax revenue= $100 x 75= $7,500DWL = $1,250PS =PB =A $100 tax on airplane tickets12What Determines the Size of the DWL?Which goods or services should govt tax to raise the revenue it needs? One an

10、swer: those with the smallest DWL. When is the DWL small vs. large? Turns out it depends on the price elasticities of supply and demand. Recall: The price elasticity of demand (or supply) measures how much QD (or QS) changes when P changes. 13When supply is inelastic,its harder for firms to leave th

11、e market when the tax reduces PS. So, the tax only reduces Q a little, and DWL is small. DWL and the Elasticity of SupplyPQDSSize of tax14DWL and the Elasticity of SupplyPQDSSize of taxThe more elastic is supply, the easier for firms to leave the market when the tax reduces PS, the greater Q falls b

12、elow the surplus-maximizing quantity, the greater the DWL. 15DWL and the Elasticity of DemandPQDSSize of taxWhen demand is inelastic,its harder for consumers to leave the market when the tax raises PB. So, the tax only reduces Q a little, and DWL is small. 16DWL and the Elasticity of DemandPQDSSize

13、of taxThe more elastic is demand, the easier for buyers to leave the market when the tax increases PB, the more Q falls below the surplus-maximizing quantity, and the greater the DWL. 17Would the DWL of a tax be larger if the tax were on:A.Breakfast cereal or sunscreen?B.Hotel rooms in the short run

14、 or hotel rooms in the long run?C.Groceries or meals at fancy restaurants?A C T I V E L E A R N I N G 2 Elasticity and the DWL of a tax1818A.Breakfast cereal or sunscreenFrom Chapter 5: Breakfast cereal has more close substitutes than sunscreen, so demand for breakfast cereal is more price-elastic t

15、han demand for sunscreen. So, a tax on breakfast cereal would cause a larger DWL than a tax on sunscreen.A C T I V E L E A R N I N G 2 Answers1919B.Hotel rooms in the short run or long runFrom Chapter 5: The price elasticities of demand and supply for hotel rooms are larger in the long run than in t

16、he short run. So, a tax on hotel rooms would cause a larger DWL in the long run than in the short run.A C T I V E L E A R N I N G 2 Answers2020C.Groceries or meals at fancy restaurantsFrom Chapter 5: Groceries are more of a necessity and therefore less price-elastic than meals at fancy restaurants.S

17、o, a tax on restaurant meals would cause a larger DWL than a tax on groceries.A C T I V E L E A R N I N G 2 Answers2121The government must raise tax revenue to pay for schools, police, etc. To do this, it can either tax groceries or meals at fancy restaurants.Which should it tax?A C T I V E L E A R

18、N I N G 3 Discussion question2222How Big Should the Government Be?A bigger government provides more services, but requires higher taxes, which cause DWLs. The larger the DWL from taxation, the greater the argument for smaller government. The tax on labor income is especially important; its the bigge

19、st source of govt revenue. For the typical worker, the marginal tax rate (the tax on the last dollar of earnings) is about 40%. How big is the DWL from this tax? It depends on elasticity.23How Big Should the Government Be?If labor supply is inelastic, then this DWL is small. Some economists believe

20、labor supply is inelastic, arguing that most workers work full-time regardless of the wage. 24How Big Should the Government Be?Other economists believe labor taxes are highly distorting because some groups of workers have elastic supply and can respond to incentives:Many workers can adjust their hou

21、rs, e.g., by working overtime.Many families have a 2nd earner with discretion over whether and how much to work. Many elderly choose when to retire based on the wage they earn.Some people work in the “underground economy to evade high taxes. 25The Effects of Changing the Size of the TaxPolicymakers

22、often change taxes, raising some and lowering others. What happens to DWL and tax revenue when taxes change? We explore this next.26Q2Q1DWL and the Size of the TaxPQDScauses the DWL to more than double.Doubling the tax2TTInitially, the tax is T per unit. initial DWLnew DWL27Q3DWL and the Size of the

23、 TaxPQDSQ13TTcauses the DWL to more than triple.Tripling the taxInitially, the tax is T per unit. initial DWLnew DWL28DWL and the Size of the TaxDWLTax sizeSummaryWhen a tax increases, DWL rises even more.ImplicationWhen tax rates are low, raising them doesnt cause much harm, and lowering them doesn

24、t bring much benefit. When tax rates are high, raising them is very harmful, and cutting them is very beneficial. 29Q2Revenue and the Size of the TaxPQDSQ1PBPSPBPS2TTWhen the tax is small, increasing it causes tax revenue to rise. 030Q3Revenue and the Size of the TaxPQDSQ2PBPSPBPS3T2TWhen the tax is larger, increasing it causes tax revenue to fall. 031The Laffer curve shows the relationship between the size of the tax and tax revenue. Revenue and the Size of the TaxTax sizeTax revenueThe Laffer curve03