To the extent that high incomes can be attributed to very high demand for very scarce abilities, the labor supply effects of a substantial increase in the tax rate
a. will be zero as long as the labor supply curve is vertical.
b. will be significant because the demand curve is fixed.
c. cannot be predicted because the substitution and income effects offset each other.
d. will be zero as long as there is no economic rent in the income.
a
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If we compare the U.S. GDP and the Chinese GDP
A) real GDP per person is about the same in the two countries. B) U.S. real GDP per person is less than China's real GDP per person once we adjust for currency differences. C) China's real GDP per person is less than real GDP per person in the United States. D) real U.S. GDP per person was much larger than China's real GDP per person when purchasing power parity prices are used but is less than China's real GDP per person when exchange rate prices are used.
A perfectly competitive firm shuts down in the short-run when the market price is less than the average variable cost
a. True b. False Indicate whether the statement is true or false