If the Labor Supply Curve Is Very Elastic, a Tax

question 201

Multiple Choice

If the labor supply curve is very elastic, a tax on labor

• A)has a large deadweight loss.
• B)raises enough tax revenue to offset the loss in welfare.
• C)has a relatively small impact on the number of hours that workers choose to work.
• D)results in a large tax burden on the firms that hire labor.

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