The government collects a specific tax of t for each hour worked. Thus, a worker whose wage
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The government collects a specific tax of t for each hour worked. Thus, a worker whose wage is w keeps w - t after taxes and supplies H(w - t) hours of work. The government wants to know if its tax revenue will increase or decrease if it lowers t. Give a condition for that to occur in terms of the elasticity of supply of labor, h.
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The governments tax revenue is T tH w t T tH wher...View the full answer
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Related Book For
Microeconomics Theory And Applications With Calculus
ISBN: 978-0134167381
4th Edition
Authors: Jeffrey M. Perloff
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