QUESTION 3: 45 marks. Table 3: Tax paid and effective tax rate under a 5% consumption tax Taxable Tax paid (%of Income ($) Consumption ($) Income) Average Tax rate 10 000 10 000 20 000 18 000 30 000 26 000 40 000 34 000 50 000 42 000 Table 3 above presents the taxable consumption by income bracket for taxpayers in Frolicland. The consumption tax in Frolicland is 5%. a. Fill in the blanks in the table [10 marks] b. Is the tax regresive, progressive, or proportional? Explain why. Is your answer consistent with its nature as a flat tax at 5%? [10 marks] c. Would the numbers and your answer to part (b) change if the government exempts certain basic necessities such as food and clothing? Explain. [10 marks] d. Is a consumption tax likely to be more or less efficient than an income tax with a comparable yield? Would exempting food and clothing make the consumption tax more or less efficient? Explain. [15 marks]