Refer to the information provided in Figure 32.1 below to answer ...

[vinney12]

Question 1

According to supply-side economists, as tax rates are reduced, labor supply should increase. This implies that

◦ the income effect of a wage change is greater than the substitution effect of a wage change.
◦ the substitution effect of a wage change is greater than the income effect of a wage change.
◦ there is no income effect when tax rates are changed.
◦ there is no substitution effect when tax rates are changed.

Question 2

Refer to the information provided in Figure 32.1 below to answer the question(s) that follow.





Refer to Figure 32.1. A cut in tax rates will decrease tax revenue if the economy moves from Point

◦ A to B.
◦ B to A.
◦ C to B.
◦ A to D.

[nguyenhoanhat]

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[corkyiscool3328]

Question 1

Refer to the information provided in Figure 32.1 below to answer the question(s) that follow.





Refer to Figure 32.1. A decrease in tax rates will definitely decrease tax revenue if the economy is at a point such as ________ on the Laffer Curve.

◦ A
◦ B
◦ C
◦ both 
A and 
B

Question 2

Refer to the information provided in Figure 32.1 below to answer the question(s) that follow.





Refer to Figure 32.1. The tax rate that will maximize tax revenue is associated with point

◦ A.
◦ B.
◦ C.
◦ D.

[wshriver]

Answer 1

both 
A and 
B

Answer 2

B.

[corkyiscool3328]

Thank you!

[wshriver]

Always glad to help...

[fasfsadfdsfa]

Question 1

Refer to the information provided in Figure 32.1 below to answer the question(s) that follow.





Refer to Figure 32.1. At point 
B

◦ an increase in tax rates will increase tax revenue.
◦ a decrease in tax rates will increase tax revenue.
◦ any change in tax rates will decrease tax revenue.
◦ any change in tax revenue will increase tax revenue.

Question 2

Refer to the information provided in Figure 32.1 below to answer the question(s) that follow.





Refer to Figure 32.1. If the economy moves from Point 
B to Point 
C, a ________ in tax rates will ________ tax revenue.

◦ cut; decrease
◦ rise; decrease
◦ cut; increase
◦ rise; increase

[braelync]

Answer 1

any change in tax rates will decrease tax revenue.

Answer 2

rise; decrease

[joblessjake]

Question 1

Refer to the information provided in Figure 32.1 below to answer the question(s) that follow.





Refer to Figure 32.1. If the economy is at a point such as 
C on the Laffer curve, a(n) ________ in tax rates will ________ tax revenue.

◦ increase; increase
◦ decrease; decrease
◦ decrease; increase
◦ change; not change

Question 2

Refer to the information provided in Figure 32.1 below to answer the question(s) that follow.





Refer to Figure 32.1. The tax rate that will ________ is associated with Point 
B.

◦ minimize tax revenue
◦ maximize tax revenue
◦ maximize unemployment
◦ minimize inflation

[huda]

Answer 1

decrease; increase

Answer 2

maximize tax revenue