Refer to the figure above. a. If you were a policymaker choosing between a $3, $6, or $9 tax, which tax would lead to the highest revenues and how much total tax revenues would you expect to collect? b. If you were a policymaker choosing between a $3, $6, or $9 tax, which tax would lead to the lowest deadweight loss? What is the deadweight loss associated with that tax?

Refer to the figure above. a. If you were a policymaker choosing between a $3, $6, or $9 tax, which tax would lead to the highest revenues and how much total tax revenues would you expect to collect? b. If you were a policymaker choosing between a $3, $6, or $9 tax, which tax would lead to the lowest deadweight loss? What is the deadweight loss associated with that tax?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter30: Government Budgets And Fiscal Policy

Section: Chapter Questions

Problem 42CTQ: Economist Arthur Laffer famously pointed out that, in some cases, income tax revenue can actually go...

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