Figure 34.2 illustrates two labor supply curves. If in-kind payments become less available in this economy and marginal tax rates decrease significantly, we would expect a shift from
A. S2 to S1 and a movement up S1.
B. S2 to S1 only.
C. S1 to S2 only.
D. S1 to S2 and a movement up S2.
Answer: D
Economics
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According to prospect theory,
A) people are concerned with wealth levels only. B) people are concerned with changes in wealth levels only. C) people never use a reference level when making their decisions. D) everybody is risk-neutral.
Economics
Marginal cost is best defined as:
a. a cost that does not vary with the rate of output. b. the difference between fixed and variable cost at any level of output. c. the amount added to total cost when one more unit of output is produced. d. the difference between price and average total cost at the profit-maximizing level of output.
Economics