This blog has been created to provide an area for economics students to read about how economics impacts daily life. It is especially useful for students to understand the application of macroeconomics as communicated through the media and governmental websites.

This online resource has been set up for educational purposes.All rights are reserved by the various websites.

For further clarification, please email colin@mrmc.com.sg

Brief description: A tax on a good will shift the supply curve vertically upwards by the amount of the tax. If the demand for the good is inelastic this will lead to a small fall in quantity and a large increase in price.

Detailed description: Where demand for the good being taxed is inelastic the majority of the tax will be borne by the consumer as the price will rise significantly. If demand was perfectly inelastic then the full amount of the tax would be borne by consumers.