An increase in the marginal tax rate, with the average tax rate held constant, will
A. increase the amount of labor supplied at any real wage.
B. not affect the amount of labor supplied at any real wage.
C. decrease the amount of labor supplied at any real wage.
D. increase the amount of labor supplied at any real wage if the average tax rate is above the marginal tax rate, but decrease the amount of labor supplied at any real wage if the average tax rate is below the marginal tax rate.
Answer: C
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This Application illustrates
A) how U.S. domestic manufacturers of auto parts have been adversely affected in recent years. B) that U.S. parts manufacturers are now facing increasing global pressures. C) the trade-offs inherent in a global economy. D) all of the above.
One of the fundamental problems a cartel faces is
A) to determine how much each producer will decrease its output. B) to determine how much each producer will increase its output. C) to determine how much each producer will lower it price. D) to determine how much each producer will lower its profit.
If the social cost is greater than the private cost in a particular market, the socially optimal equilibrium will be at a quantity:
A. greater than the private level. B. equal to the private level. C. greater than or less than the private level, depending on the size of the external costs. D. less than the private level.
If the current price of pizzas is above the equilibrium price of pizzas then
A. buyers of pizzas have an incentive to buy more. B. sellers of pizzas have an incentive to decrease the price. C. buyers of pizzas have an incentive to buy less. D. sellers of pizzas have an incentive to increase the price.