Question

Central Texas College

problem #56: Laffer Equation

During the 1980s, the controversial economist Arthur Laffer promoted the idea that tax increases lead to a reduction in government revenue. Called supply-side economics, the theory uses functions such as

This function models the government tax revenue, f(x), in tens of billions of dollars, in terms of the tax rate, x. The graph of the function is shown. It illustrates tax revenue decreasing quite dramatically as the tax rate increases. At a tax rate of (gasp) 100%, the government takes all of our money and no one has an incentive to work. With no income earned, zero dollars in tax revenue is generated.

Use function f and its graph to solve.

1. Find f(40).Round your answer to two decimal places.

webapps/assess launchAssessment.jsp: course_id=_236025_1&content_id=_106065 /9 1& mode=view Application This question can be found in Chapter 3: Section 3.3. Problem #56: Laffer Equation During the 1980s, the controversial economist Arthur Laffer promoted the idea that tax increases lead to a reduction in government revenue. Called supply-side economics, the theory uses functions such as f ( x ) = - 80x - 8000 x - 110 -, 30 S x s 100 This function models the government tax revenue, f(x), in tens of billions of dollars, in terms of the tax rate, x. The graph of the function is shown. It illustrates tax revenue decreasing quite dramatically as the tax rate increases. At a tax rate of (gasp) 100%, the government takes all of our money and no one has an incentive to work. With no income earned, zero dollars in tax revenue is generated. Use function f and its graph to solve. Government Tax Revenue (tens of billions of dollars) 80 - f(x) = 80.X - 8000 x - 110 60 40 At a 100% tax rate, 20 $0 in tax revenue is generated. 20 40 60 80 100 Tax Rate to start. Click Cancel to quit. Cancel Begin