A tax on productive activity tends to
a. increase formal market activity because it decreases prices
b. decrease formal market activity because it increases work incentives
c. decrease formal market activity because it lowers the return on such activity
d. decrease activity in the underground economy because people are afraid of being connected with tax fraud
e. increase activity in the underground economy because people are afraid of being connected with tax fraud
C
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The above figure shows the market for college education in the United States. With no government intervention, the unregulated market equilibrium is ________ because education generates ________
A) efficient; positive external benefits B) inefficient; positive external benefits C) inefficient; positive external costs D) efficient; positive external costs E) inefficient; public goods
Which of the following statements is true about efficiency wages?
a. Efficiency wages reduce monitoring cost of the employer. b. Employees benefit more from efficiency wages than employers. c. Productivity of the employee is usually unaffected by efficiency wages. d. Loafing is more rewarding for employees who earn efficiency wages.