Suppose That All Workers Place a Value on Their Leisure

question 33

Multiple Choice

Suppose that all workers place a value on their leisure of 40 goods per day.The production function relating output per day Y to the number of people working per day N is Y = 200N - N²
And the marginal product of labor is
MPN = 200 - 2N.
A 20% tax is levied on wages.In terms of lost output,what is the cost of the distortion introduced by this tax?

• A)25
• B)75
• C)150
• D)225

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Definitions:

Gene Therapy

A therapeutic approach that includes modifying the genes within a patient's cells to cure or stop diseases.

Embryonic Stem Cells

Cells derived from the early embryo that have the potential to develop into almost any cell type in the body.

Tissues

Groups of similar cells in the body that work together to perform a specific function, such as muscle or nerve tissue.

Gene Therapy

A technique that modifies a person's genes to prevent or treat disease, often involving replacing malfunctioning genes with functional ones.