Indirect Taxation and Government Intervention: Analyzing through Economic Models

Indirect Taxation and Government Intervention: Analyzing through Economic Models

Assessment

Interactive Video

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Quizizz Content

Business

11th Grade - University

Hard

The video explores indirect taxation as a form of government intervention to address market failures, particularly in cases of over-provision. It covers the types of fiscal interventions, including unit and ad valorem taxes, and their effects on supply and demand. The video also explains how indirect taxes can internalize externalities using supply-demand and marginal cost-benefit frameworks, with examples like congestion charging. The goal is to improve market welfare by aligning private decisions with social costs.

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10 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the primary economic reason for governments to impose indirect taxes?

To rectify market failures

To reduce inflation

To increase government revenue

To support local businesses

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How do unit taxes differ from ad valorem taxes?

Both are percentages of the product's value.

Unit taxes are a fixed amount per unit, while ad valorem taxes are a percentage of the product's value.

Both are fixed amounts per unit.

Unit taxes are a percentage of the product's value, while ad valorem taxes are a fixed amount per unit.

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What happens to the supply curve when an indirect tax is imposed?

It shifts outwards

It shifts inwards

It becomes steeper

It remains unchanged

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which factor determines how much of the tax burden is passed on to consumers?

The supply curve

The demand curve

The production cost

The price elasticity of demand

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the effect of an indirect tax on a product with a negative externality?

It increases the deadweight loss

It has no effect on deadweight loss

It increases the product's demand

It reduces the deadweight loss

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How can indirect taxes improve societal welfare?

By increasing market prices

By increasing production costs

By eliminating deadweight loss

By reducing government revenue

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the purpose of congestion charging in cities?

To decrease public transport usage

To encourage car ownership

To reduce traffic and emissions

To increase traffic

8.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What was the impact of congestion charging in London by 2006?

Traffic levels increased by 16%

Journey times increased by 30%

Traffic levels decreased by 16%

Journey times remained the same

9.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is meant by 'internalizing the externality'?

Forcing private agents to ignore externalities

Forcing private agents to consider externalities in their decisions

Reducing the cost of externalities

Eliminating all externalities

10.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which city introduced congestion charging in 2003?

London

Paris

Tokyo

New York

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