Unit 2.7 · Role of Government in Microeconomics
Indirect Taxes
AO2AO4Diagram required
Syllabus Requirement
Taxes imposed on goods and services to raise revenue or discourage consumption (e.g. cigarettes, alcohol).
Assessment Objectives
AO2Application and Analysis
AO4Use of Appropriate Skills
Summary
This topic covers indirect taxes, which are government charges on the sale of goods and services rather than on income. Understanding indirect taxes is important in microeconomics as they affect market prices, consumer behavior, and government revenue, while also addressing issues related to demerit goods and economic efficiency.
