Figure 8-19. The figure represents the relationship between the size of a tax and the tax revenue raised by that tax.

-Refer to Figure 8-19.If the economy is at point A on the curve,then a small increase in the tax rate will

Question

Figure 8-19. The figure represents the relationship between the size of a tax and the tax revenue raised by that tax.
 
-Refer to Figure 8-19.If the economy is at point A on the curve,then a small increase in the tax rate will

Quizplus · Accepted Answer

At point A, the economy is likely on the upward-sloping side of the Laffer curve, where an increase in the tax rate increases both tax revenue and deadweight loss.