Note: This is post #12 in a weekly video series on basic microeconomics.

Why do taxes exist? What are their effects? In this video by Marginal Revolution University, economist Alex Tabarrok explainshow taxes affect consumer surplus and producer surplus. He also discusses the concept of deadweight by considering a real-world example from the 1990s: taxing luxury yachts.

(If you find the pace of the videos too slow, I’d mend watching them at 1.5 to 2 times the speed. You can adjust the speed at which the video plays by clicking on “Settings” (the gear symbol) and changing “Speed” from normal to 1.25, 1.5 or 2.)

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