1. Which of the following statement(s) is correct?

(x) Economists generally agree that the most important tax in the U.S. economy is the tax on labor.

(y) A significant decrease in taxes on labor would tend to encourage more people to be "paid under the table" in an attempt to evade taxes.

(z) Labor taxes may distort labor markets greatly if the number of hours many part-time workers want to work is very sensitive to the wage rate.

Select one:

A.

(x), (y) and (z)

B.

(x) and (y) only

C.

(x) and (z) only

D.

(y) and (z) only

E.

(z) only

2. In the pizza market, the supply curve is the typical upward-sloping straight line, and the demand curve is the typical downward-sloping straight line. The equilibrium quantity in the pizza market is 80,000 pizzas per month when there is no tax. Then a tax of $3 per pizza is imposed. As a result, the government is able to raise $225,930 per month in tax revenue. We can conclude that the equilibrium quantity of pizzas has decreased by ___________ pizzas per month.

Select one:

Select one:

A.

less than 4,650

B.

more than 4,650, but less than 4,725

C.

more than 4,725, but less than 4,850

D.

more than 4,850, but less than 4,975

E.

more than 4,975