1. What is the Laffer curve and what does it say about the relationship between tax rates and tax revenue? (4 points)

For each state, do the following:

1. Create a Per Capita Tax Revenue data column. (2 points)
2. Create a scatter plot of the data. Click Insert -> Scatter. Choose the first scatter plot. Under Design, click Select Data -> Add. Plot Per Capita Tax Revenue on the horizontal axis and Tax Rate on the vertical axis. (3 points)
3. Describe the relationship between these two variables. (8 points)
4. Click Add Chart Element -> Trendline -> More Trendline Options -> Linear. You will now see a best fit line to the data which will estimate the relationship. See if any of the other possible trend line options would fit better. (2 points)
5. Provide a descriptive statistics table with information on mean, median, standard deviation, minimum value, and maximum value for each of the variables. Go to Data Analysis. Select Descriptive Statistics. Select the input range for which you want to calculate the descriptive statistics. Make sure there is a check mark in the Labels in First Row Box and Summary Statistics box. Click OK. Explain what these values indicate. (Note: Answer in relation to the information you are examining, not in general. Use eac of the values generated.) (18 points)
6. Conduct a correlation analysis between each variable pair. Go to Data Analysis. Select Correlation. Select the input range for which you want to calculate the correlation. Make sure there is a check mark in the Labels in First Row Box. Click OK. (4 points)
7. Looking at the analysis from all four states, what conclusions can you draw concerning per capita tax revenue and tax rates? (4 points)
8. Explain any difficulties or problems with the interpretation, manipulation, or reporting of the data involved in this dataset. (Note: This is not a critique of the homework assignment or the use of Excel. This is concerning questions the dataset and the results you found.) (5 points)