Q1. To determine the welfare impact of a change in the income tax rate, is it necessary to use data to estimate all of these derivatives? Why / why not? Who came up with this result?
Q2. How might you use data to estimate this behavioral response so that you can advise government on the distortions introduced by the income tax?
Q3. Notwithstanding this result, why might it still be useful to consider the impact of the government's tax instruments on the degree of evasion?