Suppose the goverment is currently imposing an $8-per-pack tax on ciganettes.True or False: The government can raise its tax revenue by increasing the per-unit tax on cigarettes.TrueFalse

Homework Government-imposed taxes cause reductions in the activity that is being taxed, which has important implications for revenue collections. To understand the effect of such a tax, consider the monthly market for cigarettes. With no tax, the equilibrium quantity is 70 packs. The following table shows the equilibrium quantity produced and sold in the market for various per unit taxes. Tax Quantity (Dollars per pack) (Packs) 70 56 42 10 35 12 28 16 14 20 0 Suppose the government imposes a $4-per-pack tax on suppliers. At this tax amount, the equilibrium quantity of cigarettes is packs, and the government collects s in tax revenue. Now calculate the government's tax revenue if it sets a tax of $0, $4, $8, $10, $12, $16, or $20 per pack. Using the data you generate, plot a Laffer curve by using the green points (triangle symbol) to plot total tax revenue at each of those tax levels. Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. Later Dries TAX RATE IDo Ly's par back TAX REVENUE (clan