Question 1
A change in tax rates ________ affect individual's behavior regarding consumption and saving if the change is permanent.
◦ is likely to
◦ will definitely
◦ will negatively
◦ will not
Question 2
The opportunity cost of leisure will fall if
◦ the wage rate increases.
◦ the wage rate decreases.
◦ nonlabor income decreases.
◦ nonlabor income increases.