Choose the One Alternative That Best Completes the Statement or Answers

question 274

Multiple Choice

Choose the one alternative that best completes the statement or answers the question.
-Economists use what is called a Leffer curve to predict the government revenue for tax rates from $0 \%$ to $100 \%$ . Economists agree that the end points of the curve generate 0 revenue, but disagree on the tax rate that produces t maximum revenue. Suppose an economist produces this rational function
$R ( x ) = \frac { 10 x ( 100 - x ) } { 75 + x }$ , where $R$ is revenue in millions at a tax rate of $x$ percent. Use a graphing calculator to graph the function. What tax rate produces the maximum revenue? What is the maximum revenue?

• A) \(37.5 \% ; \$ 210\) million
• B) \(39.6 \% ; \$ 209\) million
• C) \(34.9 \% ; \$ 207\) million
• D) \(35.8 \% ; \$ 209\) million

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Definitions:

Production Possibilities Curve

A graphical representation that shows the maximum quantity of one good that can be produced for every possible quantity of another good produced, given the available resources and technology.

Consumer Goods

Products and services that are purchased for personal use or consumption by the general public.

Capital Goods

Goods that are used in producing other goods and services rather than being bought by consumers.

Opportunity Cost

The cost of forgoing the next best alternative when a decision is made to choose one option over another.