Many thanks. Your last comments were the most important, even though negligible exam marks can be derived from it. It's no wonder this subject was originally called 'Political Economy'.
Hi, how-comes the indirect tax placed on a negative consumption externality shifts the 'costs' curve down? Surely with externalities such as smoking and other habitually addictive goods that are inelastic, that the price is fully passed onto the consumer? Why does this affect a firms costs of production? Thanks
dan roberts the tax is given to the forms so their costs increase hence the shifting supply/MSc cost causing the quantity to drop and price increase. However your evaluation of this solution is like you said if the good is inelastic in demand which tends to be the case for demerit goods, the quantity won't fall as great instead just increasing the price which can be said to be government failure. He explains this later on
it does get passed on to the consumers if you were to do a supply and demand diagram you would see that supply shifts to the left and increases costs. less would be demanded by consumers due to the increased price and you would get a movement along the demand curve.
The tax causes a shift inwards of supply as it now costs firms more to produce at that level which then provides a disincentive to produce that demerit good.
not really as indirect taxes are taxes on goods and producing them, such as vat. these are usually added onto the price of goods so it would be very hard to avoid them.
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@@harrisonlucas1381 This channel is a merit good!
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genuinely you make these explanations so much better than the edeexel textbook
Best econ channel on UA-cam, no questions asked.
Thanks Jesus
What did u get in ur a level
Many thanks. Your last comments were the most important, even though negligible exam marks can be derived from it. It's no wonder this subject was originally called 'Political Economy'.
Great video! Love the final argument about it being paternalistic - have't read that anywhere before!!
Thank you Econsplusdal!!
Thanks, Dal. Some really key points in there. 🙌🏽🔥💯
A day before my As very helpful playlist
I've got mine on Monday, How'd yours go?
It was good the multiple choices are tricky but the case studies are good
@@jra8042 so what did u get
The sugar tax is a Tax on Negative Externalities in Consumption right?
thank you for the video! will there also be triangles of welfare gain to society which can be shaded in on these diagrams?
Great video, so helpful to see the full explanation
paper 1 is tomorrow and i just learned how indirect taxes work, no need for the textbook im getting an A
Heyy! Got an A?
@@nooriftikhar632I would like to know this too
do you have any model essay answers to share
Aired for 6 years is crazy work. How’s the wife and kids pal
how does indirect cost promote allocativeefficiency?
taxes, it corrects the negative externalities and thus demerit goods are themselves under produced
Hi, how-comes the indirect tax placed on a negative consumption externality shifts the 'costs' curve down? Surely with externalities such as smoking and other habitually addictive goods that are inelastic, that the price is fully passed onto the consumer? Why does this affect a firms costs of production?
Thanks
dan roberts the tax is given to the forms so their costs increase hence the shifting supply/MSc cost causing the quantity to drop and price increase. However your evaluation of this solution is like you said if the good is inelastic in demand which tends to be the case for demerit goods, the quantity won't fall as great instead just increasing the price which can be said to be government failure. He explains this later on
it does get passed on to the consumers if you were to do a supply and demand diagram you would see that supply shifts to the left and increases costs. less would be demanded by consumers due to the increased price and you would get a movement along the demand curve.
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I should have just not gone to economics class for the past 2 years and watched your videos instead
Why does MPC shift in? With indirect tax it should increase the cost so MPC surely should shift out
The tax causes a shift inwards of supply as it now costs firms more to produce at that level which then provides a disincentive to produce that demerit good.
Could you use the laffer curve in your evaluation here?
not really as indirect taxes are taxes on goods and producing them, such as vat. these are usually added onto the price of goods so it would be very hard to avoid them.
@@phads5542 tru
2023 and u still saving lifes
Got your exams done?
are parking fees an indirect tax?
i notice how you have cost/price/benefits on the y axis, do we lay it out like this in the real exam or do we just choose one of the 3
Put all 3
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How is allocative efficiency promoted?
by taxation, negative externality is corrected and hence the commodity will no longer be overproduced
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Thanks!
wish me luck!! aim for Astar
Heyy. Did you get an A* ?
EPIC!!!!
Could you do some WJEC based economics guides?
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please make a video on Keynesian cross pleaseeeeee
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hypothecated loooool