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ECON NOTES ELASTICITY Chelsea Katz Week of Feb 11th 2013 Expenditure price x quantity If expenditure decreases so price goes up and quantity goes down If expenditure increases price goes up and quantity goes down Impact of a price increase on expenditure a b elastic falls c unit elastic constant inelastic rises Statutory and Economic Incidence Statutory Incidence of a tax the economic agent who is legally responsible for payment of a tax Economic Incidence of a tax The final distribution of the burden of a tax Tax shifting The difference between the statutory incidence of a tax and the economic incidence of a tax
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