Song earns $142,000 taxable income as an interior designer and is taxed at an average rate of 20 percent (i.e., $28,400 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 if Song chooses to spend more time pursuing her other passions besides work in response to the tax rate change and therefore earns only $106,500 in taxable income? 000 Government's tax revenues would decrease by $1,775 Government's tax revenues would increase by $1,775 Government's tax revenues would decrease by $2,025 Government's tax revenues would increase by $2,025 Government's tax revenues would remain unchanged b. What is the term that describes this type of reaction to a tax rate increase? 0000 Substitution effect Income effect Endowment effect Price effect Budget constraint c. What types of taxpayers are likely to respond in this manner? Taxpayers with more disposable income Taxpayers with less disposable income