At current income tax rates, marginal revenue of taxation is the same for Suzi and Billy. Marginal utility of consumption is equal to 2 for Suzi and equal to 10 for Billy. Which of the following would reduce total deadweight loss without reducing revenue? O Increase tax on Billy and reduce tax on Suzi. Increase tax on Suzi and reduce tax on Billy. O Reduce taxes on both Billy and Suzi. O Increase taxes on both Billy and Suzi. 22
At current income tax rates, marginal revenue of taxation is the same for Suzi and Billy. Marginal utility of consumption is equal to 2 for Suzi and equal to 10 for Billy. Which of the following would reduce total deadweight loss without reducing revenue? O Increase tax on Billy and reduce tax on Suzi. Increase tax on Suzi and reduce tax on Billy. O Reduce taxes on both Billy and Suzi. O Increase taxes on both Billy and Suzi. 22
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter8: Application: The Cost Of Taxation
Section: Chapter Questions
Problem 3CQQ
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