As the tax wedge associated with a given economic activity gets smaller, we would expect
A) more of that economic activity to occur.
B) people to engage in less of that particular activity.
C) the distortions caused by taxes on that activity to be greater.
D) no change in the practice of that activity until the tax wedge ultimately disappears.
A
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Workers should invest in additional human capital as long as the:
A. marginal benefit exceeds the marginal cost. B. opportunity cost exceeds the marginal benefit. C. opportunity cost is zero. D. marginal cost exceeds the marginal benefit.
If when income increases by 2 percent and the price does not change, the quantity of airplane travel demanded increases by 6 percent, then the income elasticity of demand of airplane travel is ________
A) 0.33 B) 0 C) negative D) 3.00
If the marginal propensity to consume is unchanged and autonomous consumption expenditures increase, then
A) saving at every level of disposable income increases. B) the break-even disposable income decreases. C) the break-even disposable income increases. D) saving is unaffected.
The aggregate supply curve of an economy: a. is a downward-sloping straight line
b. is an upward-sloping curve. c. is a vertical line parallel to the price axis. d. is a horizontal line parallel to the output axis. e. is a ray from the origin.