If the backward-bending supply curve for labor has relevance for public finance, it is because _____
a. at really high wage rates there will be insufficient labor to meet aggregate demand
b. there is a trade-off between leisure and labor
c. income taxes do no raise sufficient revenue to pay for public goods because individuals consume too much leisure
d. taxpayers are not receiving as much utility from public sector output as they are losing through the income effect associated with income taxes
d
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Suppose your economics professor has an extra copy of textbook that he or she would like to give to a student in the class. Which of the following schemes is the most likely to result in an efficient outcome?
A. Auctioning off the textbook to the highest bidder. B. Letting students take turns using the textbook. C. Giving the textbook to the student who has the lowest midterm score. D. Randomly selecting one student to receive the textbook.
The main difference between a repo and federal funds transaction is that
A) the repo transaction uses the securities for collateral while the federal funds transaction does not have collateral. B) the federal funds transaction uses securities for collateral while the repo transaction does not have collateral. C) the repo transaction has an agreed upon interest rate while the federal funds transaction has a spread between the sale and purchase price of securities. D) the federal funds transaction is normally overnight while the typical repo agreement is for 90 to 180 days.
Refer to the information. Over the $7-$5 price range, demand is
What will be an ideal response?
Interest is the:
A. price paid for the use of money. B. opportunity cost of time. C. expectation of a future return on investment. D. reward for consuming rather than saving.