If Workers Are in the Backward-Bending Section of Their Labor

question 6

Multiple Choice

If workers are in the backward-bending section of their labor supply curves,than an increase in the income tax rate will

• A) increase the tax revenue and increase the number of hours worked.
• B) increase the tax revenue and decrease the number of hours worked.
• C) decrease the tax revenue and increase the number of hours worked.
• D) decrease the tax revenue and decrease the number of hours worked.

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