Chapter 6: Supply, Demand and Government Intervention - Part 2 - price controls and taxes

Taxes 0:00
Taxes on buyers 3:24
Taxes on seller 13:28
Taxes on buyers are equivalent to taxes on sellers 21:10
Third way to analyze the impact of a tax 27:07
Elasticity and the incidence of the tax 30:23
The effect of a tax on consumer surplus and producer surplus 36:44
- Deadweight loss of the tax 40:39
- Government revenue of the tax 41:04
Taxes discourage economic activity...what do we want to encourage/discourage? 44:24
Subsidies 47:12
Luxury taxes 49:42
Comparison of price controls and taxes 54:59

[@rook839]

these are the most detailed yet the most simply explained economics lessons i have ever witnessed!!

[@azharhamza6654]

The moment Professor started talking about how politicians fool the nation, I was like that's the most honest lecture, being a student of Public administration that was the most valuable moment for me. Thank you professor for helping me understand that one quoted line "a tax on buyers is exactly exactly equivalent to a tax on sellers" Lots of Love and Prayers.

[@anushaaaa5001]

Any chance you could continue making more of these videos, Prof.? They’re golden.

[@malvynolizter]

Love to have Intermediate Economics

[@andrewelkins4920]

It was cool for me to get to see this play out in a more theoretical way finally in a classroom setting. I got the chance to work at the corporate office of a logistics company and see first hand how different taxes and regulations cut our profits and lowered the wages we were able to pay to our employees. Really good work.

[@krishnaghosh7454]

Thanks a lot professor for making this video. I was having a lot of problem in this chapter but because of this video I understood each and every stuff.

[@mindcoder2649]

Thank you from Ukraine. Damn, it's the best explanation I ever heard

[@AdilAkylov22]

How do you guys even study in such a horrible sucrumstances? университеты работают?

[@pinglu4182]

you are awesome! I love the jokes on taxing the grades of D and F.

[@DrAzevedoEcon]

Ha! I don't think the university would like it if I did that.

[@Eco-zaki]

Thank very much this helps me alot. I have a test tomorrow and this video saved my day

[@DrAzevedoEcon]

I hope you did well on the test!

[@s_s5578]

The increase in tax actually always affects the buyer. Supplier only increase the price transferring the increase in tax in increase of price for the buyer. It doesn't affect the cost of production. We all pay VAT which is a tax on supplier transfered to the buyer. The only question is the elasticity of the product which is reflected on the market share of the supplier.

[@terysantos2810]

Thanks!!

[@rajeshsapkota6528]

Would like to thank you from Nepal.

[@mohammadnasser6567]

I really like your way of teaching. You have greatly helped me understand the concepts of microeconomics, so thank you very much. If you don't mind, I have a question for you and I would be more than happy if you could answer it: How can taxes be efficient when the supply curve is perfectly inelastic or the demand curve is perfectly inelastic?

[@DrAzevedoEcon]

Thank you! I'm very happy to be able to help. In regard to taxes. If either the demand or supply curve is perfectly inelastic, then the tax will have no impact on the equilibrium quantity, and the incidence of the tax will fall completely on the perfectly inelastic side of the market...the other side of the market will bear none of the tax burden. Because the quantity does not change (compared to the situation with no tax), this tax would create no deadweight loss. In other words, it would be efficient.

[@blblablablablablablablabla4603]

sorry to disturb, do you records your lesson chapter 8-12 ? I can't see it on the playlist

[@DrAzevedoEcon]

I'm currently working on some of these chapters.

[@raghavsharma4925]

Sir, if taxes are equivalent on buyers and sellers (they may change depending on the elasticity of the supply/demand curve), then why are government officials legally allowed to use taxing certain groups as a method of acquiring votes? Shouldn't the government restrict their campaigns?

[@DrAzevedoEcon]

I don't think that restricting campaigns is necessarily the answer...there's too much gray area on what a "lie" is. I think the answer is that the voting public should be more informed about things like this. Bending the truth doesn't work as well if people know you're bending the truth.

[@raghavsharma4925]

@@DrAzevedoEcon I understand, thank you sir.

[@trixxpounce4962]

Hello, I don't understand why the tax burden is shared between the two. Like if it costs $1.00 to make a pizza, the price before the tax was $1.10 and the tax is $0.30, why can't the price for buyers be $1.40, so sellers can keep the amount $1.10 to cover their costs?

[@DrAzevedoEcon]

Because adding a tax to the buyers reduces their willingness to pay for the good (because they have to pay the tax in addition to the price of the good). This means that consumers aren't willing to pay as much for the good as they used to be....which means sellers are not going to be able to get as high a price as they used to....which means that part of the tax burden will fall on them.

[@richienickson8085]

He would tax d's and f's i cant imagine that invoice😭😭

[@Eco-zaki]

Why don't you forcus on calculations? Your channel does not contain microeconomic problems.

[@DrAzevedoEcon]

You might get more out of my Intermediate Micro videos. There are plenty of calculations. Visit my playlists page.

[@Eco-zaki]

@@DrAzevedoEcon Thank you and sorry for being rude to you.