Laffer curve and possible differences in the incentive to work for different income groups complicate the task of estimation. The structure of the curve may also be changed by policy decisions. For example, if tax loopholes and tax shelters are made more readily available by legislation, the point at which revenue begins to decrease with increased taxation is likely to become lower. Laffer presented the curve as a pedagogical device to show that in some circumstances, a reduction in tax rates will actually increase government revenue and not need to be offset by decreased government spending or increased borrowing. For a reduction
Optimal foraging theory items that an animal should carry back to its nesting site or the optimal size of a food item that an animal should feed on. Figure 1, shows an example of how an optimal decision rule could be determined from a graphical model. The curve represents the energy gain per cost (E) for adopting foraging strategy x. Energy gain per cost is the currency being optimized. The constraints of the system determine the shape of this curve. The optimal decision rule (x*) is the strategy for which the currency, energy gain per costs, is the greatest. Optimal foraging models can