If the labor supply curve is nearly vertical, a tax on labor
a. has a large deadweight loss.
b. raises a small amount of tax revenue.
c. has little impact on the amount of work that workers are willing to do.
d. results in a large tax burden on the firms that hire labor.
Answer: C
Microeconomics
- An increase in the price level may be caused
- Which of the following events can cause short-term interest rates to increase?
- Suppose that wages increase sharply this year. Other things being equal a wide-spread increase in wages will have which of the following consequences for the U.S. economy?
- An unanticipated increase in inflation this year will
- If the US economy falls into a recession, then which of the following is likely to happen?
- In 1998, the U.S. economy was at full employment which means that
- Last year, real GDP grew by 5% in the U.S. which implies that
- The current wage paid for carpenters in Raleigh is $15 per hour. At that wage there are 10,000 labor hours supplied per week while the number of labor hours demanded is 12,000. It follows that
- The home building industry in Raleigh is perfectly competitive and currently in long-run competitive equilibrium. Which of the following statements is true?
- The price elasticity of demand for flights between RDU and Washington DC is equal to -3. A 20 percent decrease in air fare between RDU and D.C. will therefore result in
- Which of the following changes in the market for loanable funds can cause interest rates to go up?
- Which of the following is an example of a contractionary fiscal policy that can be used to decrease aggregate demand and prevent inflation?
- Which of the following statements about the federal budget deficit is true?
- As the economy expands the demand for money typically increases. Other things being equal, which of the following is a likely consequence of the increase in the money demand?
- Suppose the equilibrium GDP is greater than potential real GDP. Which of the following is likely?
- Current equilibrium GDP is less than potential real GDP. According to the classical model of macroeconomic equilibrium, which of the following is true?
- Suppose the price of a key productive resource such as fuel increases. Other things being equal, which of the following will be a consequence of the increase in fuel price?
- Other things being equal, which of the following can cause a recession?
- An unanticipated increase in the inflation rate during this year will
- Which of the following statements is true?
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- Other things being equal, an increase in the average product of labor in steel production will
- A corporation earns $10 million in revenue this year. Accounting costs are $5 million for the year. The corporation owns assets valued at $20 million and has no debts. If the opportunity cost of capital for shareholders of the corporation is 10% it follows that the corporation's economic profit is
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- The supply of land is perfectly inelastic when