If the marginal tax rate rises above t * = 63%, tax revenue will decrease because
A) workers refuse to pay taxes since the tax rate is too high.
B) workers are in the downward-sloping portion of labor supply.
C) workers reduce working hours in response to the wage loss.
D) None of the above.
C
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Suppose that, a country with a closed economy opens itself to international trade and becomes a net exporter. In that case, the price of that good will ________ when the economy goes from closed to open for trade.
A. increase B. decrease C. first decrease then increase D. stay the same
Pigovian taxes are used to counterbalance:
A. negative externalities. B. network externalities. C. positive externalities. D. They could be used to counteract any of these.
Rank the following state and local government expenditure categories from largest to smallest
a. education, health, highways b. education, highways, income security c. highways, education, public order and safety d. public order and safety, highways, health
At the new equilibrium quantity of labor, the before-tax wage rate _________ and the after-tax wage rate __________.
Fill in the blank(s) with the appropriate word(s).