A virtue of income taxes over sales taxes is that _____
a. they are more comprehensive
b. they are more difficult to avoid
c. the excess burden of an income tax system is far smaller
d. progression can be built into the system
d
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The income effect of a wage decrease examines the effect of the decrease in wage income on a worker's ability to purchase goods and services
Indicate whether the statement is true or false
In the kinked demand curve model, if one firm reduces its price
A) other firms will also reduce their price. B) other firms will compete on a non-price basis. C) other firms will raise their price. D) Both A and B are correct. E) Both B and C are correct.
Sadie works at a factory for $15 an hour and typically works 40 hours a week. Sadie gets a pay raise and now earns $20 an hour. She decides to work 45 hours a week at $20 an hour. Her response to the pay increase demonstrates the:
A. labor effect outweighing the price effect. B. price effect outweighing the income effect. C. income effect outweighing the price effect. D. income effect outweighing the substitution effect.
All other things unchanged, higher saving rates contribute to higher rates of capital formation.
a. true b. false