If the government imposes a tax of $3,000 on everyone, the tax would be a(n)
a. income tax.
b. consumption tax.
c. lump-sum tax.
d. marginal tax.
c
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In the long run, an increase in FDI in the manufacturing sector will:
a. increase marginal product of labor in the agriculture sector. b. increase marginal product of labor in the manufacturing sector. c. decrease marginal product of labor in the agriculture sector. d. not change the marginal product of labor in either sector
Assume the price of capital falls relative to the price of labor and, as a result, the demand for labor increases. Therefore:
A. capital is very highly substitutable for labor. B. the output effect is greater than the substitution effect. C. the income effect is greater than the output effect. D. the substitution effect is greater than the output effect.