The market supply of labor is perfectly inelastic.It then follows that:
A) the substitution effect of wage changes is zero.
B) the income effect of wage changes is zero.
C) leisure is a normal good and the income effect of wage changes exactly offsets the substitution effect.
D) the excess burden of a tax on labor income will be zero.
Correct Answer:
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Q25: If the return to savings, r, is
Q26: Using a regular labor supply curve instead
Q27: Income from labor services (wages) account for
Q28: Interest income tends to increase with the
Q29: Which of the following will increase a
Q31: A tax on interest income:
A)causes the gross
Q32: A flat-rate tax on labor income will:
A)always
Q33: An example of a nonpecuniary return is:
A)job
Q34: Most empirical research indicates that the market
Q35: A 20 percent, flat-rate tax on labor
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