Song earns $108,000 taxable income as an interior designer and is taxed at an average rate of 20 percent fie, $21,600 of tax). Answer the questions below assuming that Congress increases the income tax rate such that Song's average tax rate increases from 20 percent to 25 percent. a. What will happen to the government's tax revenues a Song chooses to spend more time pursuing her other passions besides work in response to the tax rate change and therefore earns only $81,000 in taxable income? Government's tax revenues would decrease by $1,350 Govemment's tax revenues would increase by $1,350 Government's tax revenues would decrease by $1,600 Govemment's tax revenues would increase by $1.600 Governments tax revenues would remain unchanged b. What is the term that describes this type of reaction to a tax rate increase? Substitution effect Price effect Endowment etfect. Budget constraint lncome effect c. What types of taxpsyers are kkely to respond in this manner? Taxpayers with less disposable income. Taxpoyers with more disposabie income