The deadweight loss of an income tax is determined by the
a. amount of total tax revenue to the government.
b. marginal tax rate.
c. average tax rate.
d. ability-to-pay principle.
b
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An increase in wages will shift the supply curve up and to the left
Indicate whether the statement is true or false
Ignoring any supply-side effects, when taxes are hiked, real GDP ________ and the price level ________
A) increases; rises B) decreases; rises C) increases; falls D) decreases; does not change E) decreases; falls
An employee who has worked with only one organization all her life, and is now close to her retirement age, is unlikely to find an equally profitable position with another company because:
a. her productivity is very low. b. her firm-specific capital is of little use to other organizations. c. other organizations can not verify her previous work record. d. her preference for leisure is likely to be very high.
The concept of diminishing marginal utility is embedded in the utilitarian rationale for
a. trickle-down effects. b. enhancing market efficiency. c. redistributing income. d. maintaining the status quo income distribution.