QUESTION 3
Which of the following statements correctly describes the relationship between the size of the dead weight loss, (DWL), and the amount of
tax revenue as the size of the tax rate increases from a small tax rate to a medium rate to a large tax?
a. Both the size of the DWL and tax revenue increase.
b. The size of the DWL increases, but tax revenue decreases.
c. The size of the DWL increases, but tax revenue first increases, then decreases.
d. Both the size of the DWL and tax revenue decrease.

Yolo windows, a manufacturer of windows for commercial buildings, reports the following account information for last year (all costs are in thousands of dollars): information on january 1 (beginning): direct materials inventory $ 89 work-in-process inventory 111 finished goods inventory 1,620 information for the year: administrative costs $ 3,610 direct labor 12,900 direct materials purchases 8,210 factory and machine depreciation 11,720 factory supervision 774 factory utilities 940 indirect factory labor 2,880 indirect materials and supplies 688 marketing costs 1,480 property taxes on factory 282 sales revenue 45,800 information on december 31 (ending): direct materials inventory $ 94 work-in-process inventory 138 finished goods inventory 1,430 required: prepare an income statement with a supporting cost of goods sold statement. (enter your answers in thousands of dollars (i.e., 234,000 should be entered as