A decrease in a wage taxes causes the opportunity cost of leisure to increase.
Answer the following statement true (T) or false (F)
True
Rationale: The opportunity cost of leisure is how much a worker gives up by taking leisure. If the wage tax falls, the worker gives up more when he does not work.
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The balanced budget multiplier is
A) positive because the magnitude of government expenditure multiplier is larger than the magnitude of tax multiplier. B) negative because the magnitude of government expenditure multiplier is larger than the magnitude of the tax multiplier. C) positive because the magnitude of government expenditure multiplier is smaller than the magnitude of tax multiplier. D) equal to zero. E) negative because the magnitude of the tax multiplier is larger than the magnitude of the government expenditure multiplier.
A concert in a crowded auditorium is ________ in consumption
A) non-excludable and non-rival B) excludable but non-rival C) excludable and rival D) non-excludable but rival
How would the elimination of a sales tax affect the market for a product that had been subject to the tax?
A) The equilibrium price for the product would fall by less than the amount of the tax. B) The reduction in government revenue from the tax would be made up by an increase in property taxes. C) The supply of the product would become more elastic. D) The demand for the product would rise and the equilibrium price would fall by the amount of the tax.
The price elasticity of demand for a good is influenced by which of the following factors?
a. the responsiveness to changes in income b. the cost of resources to produce the good c. the availability of substitutes d. the level of competition among sellers e. the number of uses for the good