A tax on wages will
a. reduce labor supply since leisure becomes cheaper.
b. raise labor supply since income is reduced.
c. have an unpredictable impact on labor supply since there are both substitution and income effects.
d. have a predictable impact since economists know substitution effects will dominate.
c
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Which of the following can prevent markets from reaching efficiency? I. decreasing marginal benefit II. taxes III. quantity regulations that limit the quantity that may be produced
A) I and II B) I and III C) II and III D) I, II and III
According to the text, Israelis living on a kibbutz in Israel
a. leave the economic decisions to the economists on the kibbutz b. are adverse to profit-maximizing behavior c. shifted from manufacturing to farming in the 1960s d. behave according to the MC = MR rule e. act communally so do not let prices affect their decisions
The profit maximizing firm produces where total revenue exceeds total cost by the greatest amount
Indicate whether the statement is true or false
When the price of a video rental was $2.00, ticket sales at the local movie theatre averaged 180 admissions per night. Then the video store reduced the price of a video rental to $1, and the theatre manager reported that ticket sales had fallen to 126
per night. What is the approximate value of the cross price elasticity of demand between video rentals and theatre tickets? A) -0.53 B) +0.30 C) +0.53 D) +1.67