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In modern economic literature, the most common measure of a taxpayer's loss from a distortionary tax, such as a tax on bicycles, is the equivalent variation, the maximum amount that a taxpayer would be willing to forgo in a lump sum to avoid the tax. The deadweight loss can then be interpreted as the difference between the equivalent variation ...
In economics, the Laffer curve is a theoretical relationship between rates of taxation and the resulting levels of the government's tax revenue. If the tax rates are too high, discouraging labor and investment, a reduction in tax rates may in fact lead to an increase in government tax revenues, because it will encourage the entities to work and ...
The decrease in supply creates an economic deadweight loss (DWL) and a decline in consumer surplus. [5] This is viewed as socially undesirable and has implications for welfare and resource allocation as larger firms with high markups negatively effect labour markets by providing lower wages. [5]
Economic data releases raised concerns about a rebound in inflation. The Dow Jones has lost 1,200 points over the past two days. US stocks sold off on Friday in their worst day of 2025, just two ...
Gregory Daco, chief economist at Ernst & Young, said imposing tariffs “on large trading partners would have severe economic consequences” for the U.S., Mexico and Canada, “and could lead to ...
From an economic aspect, congestion is a negative externality, for drivers can affect other drivers' costs of travel, such as costs of time, miles, or gasoline. [28] Therefore, in 1920 A. C. Pigou published the first edition of The Economics of Welfare and tried to solve the congestion problem.
Ryan Herzog, a professor of economics at Gonzaga University, said there are no easy answers for small-town communities that mostly depend on a single major employer like the french fry plant.
Deadweight loss and excess burden of taxation are synonyms closely related. I propose that we merge them. --Explodicle 16:36, 18 March 2008 (UTC) []We can not merge these two terms because while they "might" be closely related to one another, deadweight loss in this instance represents a general definition unlike excess burden of taxation which refers to a specific area (tax) reflecting the ...