A decrease in the income tax rateO a. increases the tax wedge.O b. decreasespotential GDP.c. decreases the demand for labor.d. increases the supply of labor.

Income tax refers to the tax that is imposed by the government or concerning authority on the…

Answered: A decrease in the income tax rate O b.…

A decrease in the income tax rate O b. O a. increases the tax wedge. decreases potential GDP. c. decreases the demand for labor. d. increases the supply of labor.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: What would cause a fall in the tax base? OA. The number of residents earning income fell. B. Incomes…

A: The tax base refers to the total amount of assets or income that can be taxed by a government. In…

Q: 15 The diagram shows the percentages of those on low pay and those on extremely low pay in a country…

A: A firm’s willingness to pay for each unit of labor it wishes to hire is shown by the labor demand…

Q: New Zealand along with many other countries nas a progressive tax system. What is a proaressive tax…

A: A Progressive Tax is defined as a tax that tends to increase the average tax burden with an increase…

Q: A decrease in the income tax rate O a. increases the tax wedge. O b. decreases potential GDP. Oc.…

A: Income tax is a govt-imposed tax on the individual's income. This is a method to secure govt revenue…

Q: Consider the market for unskilled labor in Iowa. Suppose the state government votes to impose a…

A: Market equilibrium occurs when the quantity demanded of a product or service by consumers is equal…

Q: Consider a perfectly competitive labor market with a very inelastic supply of labor. If a payroll…

A: Elasticity of labor supply measures the responsiveness of number of labor supplied to changes in the…

Q: Taxes adversely affect the allocation of resources because Othey do not always fall more heavily on…

A: Taxes are collected by the government. Taxes are the major source of revenue for the government.…

Q: Which of the following is not an explanation for the wage gap between workers with college education…

A: College Education: A college education is a form of post-secondary education that typically involves…

Q: and the price thai A. doesn't change; doesn't change B. doesn't change; rises by $1 a can C.…

A: 3. Compared to the old total surplus, the new total surplus will be less by the amount of the tax…

Q: Economics: Labor Economics Question: 1 In a competitive labor market if a payroll tax is…

A: Payroll tax is a tax that is levied on employers or employees, based totally on the wages and…

Q: 8.Draw a theoretical market for low-skilled labor along with a binding minimum wage. Indicate if…

A: Equilibrium is where the demand curve intersects the supply curve. Minimum wage (price floor) is…

Q: Assume the market wage in industry A is $9/hour. If the government increases the minimum wage from…

A: Minimum wage is a price floor implemented by the government usually with the aim of increasing…

Q: New York seals deal on $15 minimum fast-food wage "Raising the minimum wage to $15 an hour will add…

Q: 1. A payrol tax Is born entirely by workers if the supply of labor is perfectly inelastic. True or…

A: Taxation is the cycle by which a government or other taxing power powers a financial charge or duty…

Q: The demand for labor isa. derived demand.b. featherbedding demand.c. marginal utility demand.d. All…

A: The firms tend to use the production inputs in the production process. The firms or businesses…

Q: traditional theory predicts that labor demanded would supplied would a. Increase, increase b.…

A: A minimum wage is the least remuneration that employers can legally pay their employees—the price…

Q: What is the effect in a labor market when the government introduces a minimum wage above the current…

A: When the government introduces a minimum wage above the current market wage rate then unemployment…

Q: Define economic rent. In the graph below, assume that the market demand curve for labor isinitially…

A: Labor: It refers to the people who work and produces goods and services in the economy. The labor is…

Q: soda consumers. Before the tax, 40,000 liters of soda were sold every week at a price of $9 per…

A: In economics, the impact of taxes, especially on the market equilibrium and consumer behavior, is a…

Q: Wage W₁ W2 Figure 18-7 S₁ S2 Quantity Refer to Figure 18-7. If the relevant labor supply curve is S2…

A: A labor market is a dynamic and complex economic system that encompasses the interaction between…

Q: An increase in the supply of labor will ________ wages and ________ employment. A. decrease;…

A: Supply of labor shows how much labor is supplied at different wage rates.

Q: The figure shows the labour market when an income tax is imposed. The tax wedge is OA. $15 an hour…

A: The real wage rate describes the purchasing power of wages, adjusted for inflation. It shows the…

Q: In recent years, unemployment rates in several European countries have been higher than unemployment…

A: The unemployment rate in the United States (US) and Europe differs for a variety of reasons. First,…

Q: eco

A: Step 1: The minimum wage is the lowest amount of money that employers are permitted by law to pay…

Q: Efficiency wage theory suggests that workers will be paid less than their reservation wage. OA. O B.…

A: The markets are the places where the buyers, and sellers interact with each other, and get involved…

Q: The burden of a tax on a good is said to fall completely on the producers if the: Select one: a.…

A: Tax is the amount that is levied on the income it is bared by both consumer and producer as both…

Q: The demand for a factor of production is called a derived demand because it is derived from O A. a…

A: Derived demand is the demand that is derived from demand from some other commodity. For eg: you want…

Q: Assume the government collects a payroll tax of $10 per hour from employers. 1.) Using the line…

A: The labor supply curve refers to the graphical representation of the relationship between the…

Q: How does who a tax is imposed on impact who bears the burden of the tax? If a $3 tax is imposed on…

A: Economics as a subject deals with the allocation of scarce resources among humans with unlimited…

Q: 1. In a free market for labor the wage rate is determined by essentially Supply and Demand, the […

A: The wage rate definition is the pace of remuneration for a laborer. It is one of the focal…

Q: The income effect on labor supply is likely to be a. small because most people don't have the…

A: Income effect: It is explained by the change in the quantity supplied of a good due to a change in…

Q: A change to personal income tax rates has both an income and a substitution effect on labor supply.…

A: Any change in the labor income of workers has two effects leading to the change in labor supply or…

Question

A decrease in the income tax rate
O a. increases the tax wedge.
O b. decreases
potential GDP.
c. decreases the demand for labor.
d. increases the supply of labor.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Define income tax

VIEW

Step 2: Explain the correct option

VIEW

Step 3: Explain why other options are incorrect

VIEW

Solution

VIEW

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

57
Tax incidence indicates O A. who is not legally required to send a tax payment to the government. O B. who is legally required to send a tax payment to the government. OC. the burden of a tax on consumers. O D. the burden of a tax on producers. O E. the actual division of the burden of a tax.
I need help with this question
QUESTION 3 A determinant of the demand for labor is the: O a. quantity of labor supplied. b. price of labor. c. price of the product made with the labor. d. marginal cost of hiring labor. QUESTION 4 A lower wage: a. has an income effect but not a substitution effect on the quantity of labor supplied. b. means a higher income for any given level of labor supplied. c. has an income effect which is always negative with respect to the quantity of labor supplied. d. has an income effect which is always positive with respect to the quantity of labor supplied.
A country has two regions, the North and the South, which are identical in all respects except the hourly wage and the number of workers. The demand for labor in each region iswN = $20 - .5EN and wS = $20 - .5ESwhere EN and ES are millions of workers. Currently there are 6 million workers in the North and 18 million workers in the South.a. What is the wage in each region?b. If there are no shocks to the economy, migration over time will result in an equalization of wages and employment. What would be the long-run wage and employment level in each region?c. Return to the original setup where there are 6 million workers in the North and 18 million workers in the South. As a policymaker, you decide not only to allow 2 million immigrants of working age to enter your country, but you have the authority to resettle the immigrants wherever you want. How should you distribute immigrants across the regions to maximize the country’s immigration surplus? Besides maximizing the immigration surplus…
Economics: Labor Economics Question: 1 An employment subsidy will cause all of the following to occur except: A. An employment subsidy is essentially a negative tax B. An employment wage subsidy reduces the net wage a firm pays C. An employment subsidy will shift the labor demand curve up D. An employment subsidy does not affect the size of a firm's workforce Question: 2 The lower the elasticity of substitution between labor and capital the less elastic is the demand for labor. This is because: a.a firm is more willing to pay higher labor costs if it is difficult to substitute capital for labor. b.a firm is less willing to pay higher labor costs if it is easy for the firm to substitute capital for labor. c.the firm’s output price falls when the firm produces more output. d.labor supply increases when wage increase e.firms always have options of substituting capital for labor. Question: 3 In terms of migration what is mean by wage convergence? a. Wages in a particular location will…
Which payroll tax is imposed on both the employee and the employer? O a. federal unemployment tax b. state unemployment tax O c. federal income tax Od. FICA tax
25. Which of the following statements is correct? a. A disadvantage of a minimum-wage law is that it may benefit unskilled workers who are low income workers. b. A disadvantage of a negative income tax program is that a poor person who chooses not to work many hours would not receive a cash benefit. c. There are no disadvantages to minimum-wage laws, negative income taxes, or the Earned Income Tax Credit (EITC). d. A disadvantage of an Earned Income Tax Credit (EITC) is that a person who is unable to work due to a disability does not benefit from the program.