To the Extent That High Incomes Can Be Attributed to Very

question 252

Multiple Choice

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.

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