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Ignoring Taxes When Making Redistributive Decisions Has No Impact on Equity

question 13

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Ignoring taxes when making redistributive decisions has no impact on equity.


Definitions:

Producer Surplus

The difference between how much producers are willing to accept for a good versus how much they actually receive.

Price Support

Price set by government above free-market level and maintained by governmental purchases of excess supply.

Producer Surplus

The difference between the amount producers are willing to accept for a good or service and the actual higher market price they receive.

Market Equilibrium

A condition in a market where the quantity demanded equals the quantity supplied, leading to no pressure for price to change.

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