An income tax will have zero welfare cost when an individuals labor supply curve is perfectly inelastic _____
a. always
b. never
c. only if the income effect is zero
d. only if the substitution effect is zero
d
You might also like to view...
Which of the following statements is true?
A) The relationship between labor demand and wage rate and the relationship between labor supply and wage rate are both positive. B) The relationship between labor demand and wage rate and the relationship between labor supply and wage rate are both negative. C) The relationship between labor demand and wage rate is positive, whereas the relationship between labor supply and wage rate is negative. D) The relationship between labor demand and wage rate is negative, whereas the relationship between labor supply and wage rate is positive.
Suppose that the local hospital claims that the wages of nurses are too high. Yet, the hospital has 10 nursing positions open and no applicants for the jobs. Is the hospital's claim legitimate? Why or why not?
What will be an ideal response?
When consumers are exposed to additional choices that result from the introduction of a new product,
a. their satisfaction is likely to be lowered as a result of their having to make additional choices. b. a product-variety externality is said to occur. c. an advertising externality is said to occur. d. consumers are likely to experience negative consumption externalities.
Number of WorkersUnits of Output001402903126415051656180Refer to the above data. Average product is at a maximum when:
A. two workers are hired. B. four workers are hired. C. three workers are hired. D. five workers are hired.