Question
If the labour supply curve is nearly vertical, a tax on labour
1. has a large deadweight loss.
2. will raise small amounts of tax revenue.
3. has little impact on the amount of work workers are willing to do.
4. will raise small amounts of tax revenue and it has little impact on the amount of work workers are willing to do.
Answers is 4. Because at 50% or vertical maximum revenue is raised.
1. has a large deadweight loss.
2. will raise small amounts of tax revenue.
3. has little impact on the amount of work workers are willing to do.
4. will raise small amounts of tax revenue and it has little impact on the amount of work workers are willing to do.
Answers is 4. Because at 50% or vertical maximum revenue is raised.