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3 years ago

Which of the following scenarios is consistent with the Laffer curve?

Business

1 answer:

sergejj [24]3 years ago

3 0

Answer:

No option is correct.

a. An increase in the tax rate always increases tax revenue. ⇒ FALSE, if tax rates increase beyond the optimal level, instead of increasing total revenue they will decrease it.
b. The tax rate is 1 percent, and tax revenue is very high. ⇒ FALSE, very low tax rates will result in very low government revenue.
c. The tax rate is 99 percent, and tax revenue is very high. ⇒ FALSE, very high tax rates will result in very low government revenue.
d. A decrease in the tax rate always increases tax revenue. ⇒ FALSE, if tax rates decrease beyond the optimal level, instead of increasing total revenue they will decrease it.

Explanation:

According to Arthur Laffer, a direct and sometimes inverse relationship exists between tax rates and government revenue. Sometimes a lower tax rate can result in higher government revenue. But that is not always the case. Sometimes an increase in the tax rate can increase government revenue. The optimal tax rate (T*) is equal to the tax rate that will allow the government to collect the highest amount of revenue. Any lower or higher tax rate will decrease government revenue.

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Why do employers prefer employees with good work ethics? A. because an employee with good work ethics will always be a team play

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D. because an employee with good work ethics can prove to be an efficient resource overall ( because its common sense)

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3 years ago

The primary disadvantage of using ______ is that they may have a low response rate and thus a limited impact on sales.

sweet [91]

money refunds

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1 year ago

You currently have a one-year-old loan outstanding on your car. you make monthly payments of $ 400$400. you have just made a pa

Verizon [17]

<span>If I have a one year loan outstanding on my car and make monthly $400 payments, my timeline would include twelve equal payments of $400 starting now. The bank's timeline would be the same twelve equal installments of $400 but they would be cash inflows since I am paying the money to the bank. I would consider the $400 a cash outflow.</span>

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2 years ago

The budgeted income statement presented below is for Burkett Corporation for the coming fiscal year. If Burkett Corporation achi

nata0808 [166]

Answer:

Margin Of Safety= $275,862

Explanation:

We can calculate the margin of safety easily by the formula given below

Formula: Margin of safety = Budgeted sales - Breakeven sales

As breakeven sales are not given in the data Firstly we need to find out break even sales in order to calculate margin of safety

Breakeven sales= $\frac{Total fixed cost}{Contribution margin ratio}$

As you can see in the data fixed cost s given but contribution margin ratio is not

Contribution margin(Sales revenue - All variable cost)= $1,000,000 - ($270,000 + $240,000 + $150,000 + $50,000) = $1,000,000 - $710,000 = $290,000

Sales price per unit = Total sales/Number of units sold

Sales price per unit= $1,000,000/50,000 = $20

Budgeted contribution margin= $290,000/50,000 = $5.80

Contribution margin ratio = Budgeted contribution margin per unit/Sales price per unit

Contribution margin ratio = $5.80/$20 = 29%

Lets put values in breakeven formula to find breakeven sales

Breakeven sales= $\frac{Total fixed cost}{Contribution margin ratio}$

Breakeven sales= $\frac{210000}{0.29}$

Breakeven sales= $724,138

Now we have both budgeted sales and breakeven sales, we can easily calculate e of safety

Margin of safety = $1,000,000- $724,138

Margin of safety = $275,862

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3 years ago

True or false: if society wishes to reduce overall pollution by a certain amount, it is efficient to have firms with highest pro

AveGali [126]

TRUE

If the society wishes to reduce overall pollution by certain amount, it is efficient to have firms with highest profit bearing the largest burden of reducing pollution and firms with lowest profit bearing the least burden. This is because it will not lead to overall burden on the small firms. If large firms and small firms were to reduce the pollution burden on same rate then it will be very costly for the smaller firms to bear that and it will be a burden of cost on smaller firms.

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3 years ago