Answer Happy

1. Governments often aim to reduce income inequalities. Thediagram shows the effects of using taxation and benefits to try toachieve this aim. What can be concluded about the effects oftaxes and benefits from the diagram?
2. A community relies on a private company to supplyelectricity using a coal-fired power station. The power stationcauses air pollution which imposes an external cost shown in thediagram. The government decides to impose a tax on theelectricity company to correct market failure. What represents thetax?
A. WX
B. WY
C. XY
D. YZ
3. What defines average variable cost?
4. The table shows the average incomes of the richest 20%of households and the poorest 20% of households in the UK(2015–2016), and the effects of government taxation and benefits onaverage income. What can be concluded from the information in thetable?
100 000- average income per household 80 000- ($ per year) 60 000- 40 000- 20 000- bottom 20% 2nd 3rd 4th 20% 20% 20% household income top 20% key original income disposable income final income
costs, revenue W Z X MSC MPC MPB = MSB electricity output
before taxes and benefits after direct taxes and cash benefits after all taxes (direct and indirect) and all benefits average income (£) of richest 20% 85000 68 000 63 000 average income (£) of poorest 20% 7000 13 000 17 000