According to the Laffer Curve, the amount of tax revenue A) decreases; low; increased B) increases; high; increased C) decreases; high; decreased D) increases.; low; increased when tax rates are and tax rates are
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- Tax Revenue ($) 50 NE 40 30 20 10 0 20 40 60 According to this Laffer curve, should the government increase the tax rate from 4C 80 Tax Rate (%) 100 O a.) Yes, because the tax revenue continues to increase after a tax rate of 4C b.) No, because the government should increase the tax rate to 100%. c) No, because the tax revenue is no longer maximized. NVIDIA G SYNE d.) Yes, because the government will receive a higher tax revenue. OSuppose that your state raises its sales taxfrom 5 percent to 6 percent. The state revenuecommissioner forecasts a 20 percent increase insales tax revenue. Is this plausible? Explain.ducer surplu... Practice midterm questions Review 10 9 8 7 PLEASE IGNORE Consider the supply and demand diagram corresponding with this question. Suppose that a per unit tax of $4 is placed on the good in question. At the new equilibrium, how much total tax revenue does the government collect? Price 6 5 SD3 Review 4 3 2 1 0 QEcon Mid-Sem... 1 12.0 2 3 4 Type your numeric answer and submit 5 diagram depicti... 6 7 8 9 D S 10 11 G supply a Confusing Quantity 12
- Why should businesses take into account tax impacts? O a. Taxes directly affect a business's cash flow. Ob. Taxes allow the government to pay for public goods and services O. Taxes reduce the costs of a successful project O d. Taxes increase the gross profit of a business.Question 39 In general, local tax bases tend to be: O very inelastic. O equally elastic when compared with national tax bases. more elastic than national tax bases. O less elastic than national tax bases.After the excise tax is imposed, what is the new equilibrium quantity of sofas? d. What is the total amount of revenue collected by the government from the excise tax on sofas?
- Question 20 In which case will the government collect more tax revenue if tax revenue is tax rate multiplies income? 4% tax rate and $80,000 average income 90% tax rate and $15,000 average income 30% tax rate and $40,000 average income O 15% tax rate and $95,000 average incomeconsumers increased consumption by a relatively small amount in 2008 and 2009 because thet believe the tax cuts temporary. true or falseAssume for the following scenario that there is a 10% sales tax on gasoline. Gasoline Expenditures Total Tax Due Name (Dollars) (Dollars) Determine the amount of money each individual in the following table spends on gasoline taxes and their average tax rate. Total Taxable Income Average Tax Rate (Percent) (Dollars) Tim 10,000 10,000 Brian 40,000 32,000 Crystal 55,000 38,500 Hilary 85,000 51,000 Given the information in the previous table, sales tax on gasoline is because the average tax rate as income rises.
- Match the term to its correct definition. Column A 1. 2. 3. 4. 5. 67 8. a tax for which the percentage of income paid in taxes increases as income increases a tax on the value of a property a tax for which the percentage of income paid in taxes remains the same for all income levels a tax for which the percentage of income paid in taxes decreases as income increases a tax on the dollar value of a good or service being sold a tax on the estate, or total value of the money and property, of a person who has died a tax on the production or sale of a good a tax on a person's earnings % 5 Column B a. progressive tax b. estate tax C. property tax d. regressive tax e. income tax f. excise tax g proportional tax h. es taxNet taxes are taxes paid minus O A. subsidies O B. consumption expenditure of households O C. capital expenditure D. cash benefits received from governmentsFigure 8-23. The figure represents the relationship between the size of a tax and the tax revenue raised by that tax. 6 on4m21 3 Tax Revenue B Tax Size Refer to Figure 8-23. If the economy is at point A on the curve, then a small increase in the tax rate will O increase the deadweight loss of the tax and increase tax revenue. O increase the deadweight loss of the tax and decrease tax revenue. decrease the deadweight loss of the tax and increase tax revenue. O decrease the deadweight loss of the tax and decrease tax revenue.