Suppose the government of Marina decides to pay for public radio by taxing people on the basis of the number of hours they listen to it. In order to determine the tax, it decides to conduct a survey. However, if the survey is based on voluntary self-reporting. which of the following is likely to happen? In order to evade taxes, individuals may shift from the formal, reported economy to an underground, "off the books" economy. Many individuals may understate the number of hours they listen to public radio to government in order to reduce their tax bill. c. People who report many hours of listening may pay a small proportion of their income in public radio tax. d. Many individuals may overstate the number of hours they listen to public radio to government in order to receive a lower tax bill. e. Individuals with higher incomes may pay lower taxes than individuals with lower income.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Suppose the government of Marina decides to pay for public radio by taxing people on the basis of the number of hours they listen
to it. In order to determine the tax, it decides to conduct a survey. However, if the survey is based on voluntary self-reporting.
which of the following is likely to happen?
In order to evade taxes, individuals may shift from the formal, reported economy to an underground, "off the books"
economy.
Many individuals may understate the number of hours they listen to public radio to government in order to reduce their tax
bill.
c. People who report many hours of listening may pay a small proportion of their income in public radio tax.
Many individuals may overstate the number of hours they listen to public radio to government in order to receive a lower tax
bill.
e. Individuals with higher incomes may pay lower taxes than individuals with lower income.
Transcribed Image Text:Suppose the government of Marina decides to pay for public radio by taxing people on the basis of the number of hours they listen to it. In order to determine the tax, it decides to conduct a survey. However, if the survey is based on voluntary self-reporting. which of the following is likely to happen? In order to evade taxes, individuals may shift from the formal, reported economy to an underground, "off the books" economy. Many individuals may understate the number of hours they listen to public radio to government in order to reduce their tax bill. c. People who report many hours of listening may pay a small proportion of their income in public radio tax. Many individuals may overstate the number of hours they listen to public radio to government in order to receive a lower tax bill. e. Individuals with higher incomes may pay lower taxes than individuals with lower income.
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