True, False, or Uncertain? (Use graphs to explain.)
a. Equal proportional taxes imposed on all market goods have no excess burden.
b. A tax on a product with zero elasticity of demand has no excess burden (or is "neutral").
c. The excess burden of an excise tax on a product with close substitutes is lower when the substitutes are initially taxed than when the substitutes have no initial distortions.
d. A reduction in the income tax rate will induce greater labor supply.
e. A reduction in the income tax rate will induce greater private savings.
f. A reduction in the income tax rate will induce greater risk-taking.