Proponents of cuts in income tax rates argue that when income tax rates are cut, workers have an incentive to increase their work hours. This argument is based on the assumption that
A)the opportunity cost of working is negative.
B)workers are irrational.
C)workers make decisions based on the social interest.
D)workers make decisions based on the marginal benefit of each hour worked compared to the marginal cost of work.
E)the marginal cost of each additional work hour is not important to most workers.

Question

Quizplus · Accepted Answer

The argument assumes that workers evaluate the marginal benefit of additional work hours against the marginal cost, and lower taxes increase the marginal benefit, incentivizing more work.

Proponents of Cuts in Income Tax Rates Argue That When