The figure given below depicts the tax revenue for different tax rates applied by the government. Figure 11.2 Which of the following is depicted in Figure 11.2?
A)The Lorenz curve
B)The community indifference curve
C)The aggregate labor supply curve
D)The Laffer curve
E)The Engel curve

Question

The figure given below depicts the tax revenue for different tax rates applied by the government. Figure 11.2  Which of the following is depicted in Figure 11.2?
A)The Lorenz curve 
B)The community indifference curve 
C)The aggregate labor supply curve 
D)The Laffer curve 
E)The Engel curve

Quizplus · Accepted Answer

The Laffer curve is depicted in the given figure. It shows the relationship between tax rates and tax revenue. The curve suggests that at a certain point, increasing tax rates will cause a decrease in tax revenue as it discourages work and investment. This point is known as the "Laffer point" and is depicted as the peak of the Laffer curve. Therefore, the best choice for the figure would be the Laffer curve.

The Figure Given Below Depicts the Tax Revenue for Different