Microeconomics

A tax cut will unambiguously lower income-tax revenue. Indicate wheth

A tax cut will unambiguously lower income-tax revenue. Indicate whether the statement is true or false   ANSWER False. It depends on how the quantity of labor supplied responds to the increase in the after-tax wage rate. If the income effect dominates, the quantity of labor supplied falls and so will tax revenue. If the […]

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Date: September 9th, 2020

Technological efficiency is A) a necessary and sufficient condition f

Technological efficiency is A) a necessary and sufficient condition for profit maximization. B) a sufficient but not necessary condition for profit maximization. C) a necessary but not sufficient condition for profit maximization. D) a theoretical construct with little connection to the real world.   ANSWER C  

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Date: September 9th, 2020

The belief that a cut in the income tax rate must raise government inc

The belief that a cut in the income tax rate must raise government income tax revenue has the implicit assumption that A) higher income tax reduces the number of hours worked. B) higher income tax increases the number of hours worked. C) leisure is always an inferior good. D) None of the above.   ANSWER […]

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Date: September 9th, 2020