Asked by shivangi thakur on Jun 11, 2024
Verified
When a good is taxed, the tax revenue collected by the government equals the decrease in the welfare of buyers and sellers caused by the tax.
Tax Revenue
Consists of the income that a government gains from taxation, which is used to fund public services and obligations.
Welfare
Government programs that supplement the incomes of the needy.
- Master the concept of taxation's impact on the stability of markets, particularly regarding consumer surplus, producer surplus, and government revenue shifts.
- Investigate the contribution of government tax earnings towards public gain and the welfare of the market.
Verified Answer
HR
hafizuddin RichaamiinJun 12, 2024
Final Answer :
False
Explanation :
The tax revenue collected by the government is only part of the decrease in welfare caused by the tax. The total welfare loss also includes the deadweight loss, which is the loss in consumer and producer surplus that does not translate into tax revenue.
Learning Objectives
- Master the concept of taxation's impact on the stability of markets, particularly regarding consumer surplus, producer surplus, and government revenue shifts.
- Investigate the contribution of government tax earnings towards public gain and the welfare of the market.
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