Three Sides of Harberger Triangles by Hines

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Question 1
Since the prevailing economy is characterized with uncorrected externalities, government regulations, unchecked monopolistic activities determine g economic cost is usually a standard practices and hence the use of assumptions (167). Figure one present an economy at market equilibrium when there is no tax that is q1 quantity and p1 price (167). The other supply curve comes in after introduction of tax r and the new curve shifts upwards. The area between q2 and q1 is the Harberger triangle (167). It is the difference the consumers will pay and price supply will bring in the consumer goods at. Harberger gave a more elaborative deviation of the triangle to be used in getting deadweight loss and to be used in estimating deadweight loses which are as a result of income taxes (167).
Question 2
Before Harberger, Dupuit observed that taxes introduced changed customers satisfaction more than the generated revenue. He used a figure same as harberger triangle describing welfare loss triangle (170). Jenkin used supply and demand curves to develop a figure similar to Harberger and that of Dupuit and uses the analysis to calculate tax burden to consumers or cost to consumer (170). Alfred Marshals coined the word consumer surplus (171). Marshal instisted on constancy income marginal utility and in most cases he favored holding consumption and income level constant. Two traditional factors include: Appearance of the general equilibrium theory that isolated markets and markets influences each other in the economy and social welfare problem since there were no full scare general equilibrium models.
Question 3
Harberger deadweight calculations is meaningful since he base his workings on demand curves which are developed from the returning tax revenue that goes to the consumer in lump-sum forming a general equilibrium economy leaving no funds unaccounted for (175). Tax revenues are given back to the customers this means offsetting the taxes paid without offsetting the distortion (175). Harberger demand curved used is not similar to the others as this one does not receive rebates like Marshallian nor does it have constant utilities like Hicksian (175). His significant finding is that the U.S has a monopolistic behavior that influences the resource misallocation that equals to 0.1 % of the GNP in that the corporate income tax distortion totaling to $1 billion (175). Controversies include omission of explicit consideration of redistribution, simplified treatment of ...