Using a regular labor supply curve instead of a compensated supply curve to calculate the excess burden of a tax on labor income will: a. result in an accurate estimate of the excess burden. b. overestimate the excess burden. c. underestimate the excess burden. d. accurately estimate the excess burden only if the market supply of labor is perfectly inelastic.

Using a regular labor supply curve instead of a compensated supply curve to calculate the excess burden of a tax on labor income will: a. result in an accurate estimate of the excess burden. b. overestimate the excess burden. c. underestimate the excess burden. d. accurately estimate the excess burden only if the market supply of labor is perfectly inelastic.

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter20: Income Inequality And Poverty

Section: Chapter Questions

Problem 6CQQ

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