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A Tax on Labor Causes a Larger Drop in Equilibrium

Question 29

Multiple Choice

A tax on labor causes a larger drop in equilibrium wages when:


A) the labor supply curve is flat than when it is steep.
B) the labor demand curve is flat than when it is steep.
C) the labor supply curve is steep than when it is flat.
D) the labor demand curve is steep than when it is flat.

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