21. In Figure 1 above, what is the revenue earned from a tax of T1? a. X + Z b . X C. Y d. X + Y 22. In Figure I above, what is the deadweight loss of the tax Tz? b. VYZT C. YZT d. YT 23. In Figure I above, what is the increase in the deadweight loss when the tax rises from Ti to T2? a. VYTZ - T= VYZ b. VYTZ - Z= VYT c. VYTZ - Y = VTZ d. VYTZ - V = YTZ 24. 19. In Figure I above, what is the change in revenue when the tax rises from TI to T2? a . U + X + W - ( X + Y ) = U + W - Y b. U + X + W - ( W + Y ) = U + X-Y C . U + X + W-(U+y)= X+W-y d . U + X + W -(W+x) =U+2X 25. What can the government do if the marginal benefits of public funds are greater than the marginal cost of public funds? a. The government can increase social welfare by b . The government can increase social welfare by increasing taxes and expenditures. decreasing taxes and expenditures. c. The government can decrease social welfare by d. The government can decrease social welfare by increasing taxes and expenditures. decreasing taxes and expenditures. 26. Consider the following information: Suppose a tax is levied at $1 per unit. Now suppose the tax increases by 15 percent to $1.15 per unit and the equilibrium size of the market (tax base) shrinks by 2 percent in response to the tax increase. Based on the above information, what is the increase in tax revenue? a. 10 percent b. 13 percent c. 16 percent d. 21 percent 27 . How is the benefit from a tax measured ? a. by how much the public gains from the government spending the tax revenue b. by the cost of collecting the tax c . by the interest saved because the government did not borrow the funds d. by the government's surplus, which is tax revenue minus government expenditures Figure 2 X quantity Page 4 of 7