Author Question: If the backward-bending supply curve for labor has relevance for public finance, it is because ... (Read 51 times)

james0929 · **on:** Jul 1, 2018

If the backward-bending supply curve for labor has relevance for public finance, it is because _____.

a. at really high wage rates there will be insufficient labor to meet aggregate demand
b. there is a trade-off between leisure and labor
c. income taxes do no raise sufficient revenue to pay for public goods because individuals consume too much leisure
d. taxpayers are not receiving as much utility from public sector output as they are losing through the income effect associated with income taxes

Question 2

Which of the following is not a source of rents?

a. Tariffs
b. Logrolling
c. Price supports
d. Entry barriers