Identify statements 1 and 2 as "True", "False", or "Uncertain" and explain.

(15 points each)

1.A universal basic income scheme consisting of a transfer plus a constant income tax rate is both more progressive and less inefficient (i.e.it causes a lower excess burden) than a proportional income tax, assuming that both raise the same revenue.

2.Consider a monopoly facing an inverse demand curve given by2

p= 9q?1,(1)

which produces at a constant marginal cost of 2 per unit of output (q). If anad valoremtax at ratetis collected on the monopolist's sales, the price paid by consumers will rise by exactly the percentage of the tax.

Identify statements 1 and 2 as \"True\