Pre-tax-reduction equilibrium

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True/False: Determine whether each statement is true, false, or uncertain and explain why. Answers with no explanation will receive no points.

(a) If local house prices rise by $1 after local property taxes are reduced by $1, then the pre-tax-reduction equilibrium was inconsistent with the Tiebout (1956) model.

(b) In a world with adverse selection, at least the highest-risk types will buy actuarially fair insurance if it is offered.

(c) The US social security's delayed retirement credit program (DRC) should unambiguously increase the labor supply of workers above the full retirement age.

(d) One solution to the crowd-out problem of free public education (i.e. public education leading some families to have less education overall) is the use of educational vouchers. With this system, educational spending would increase for all the families. Thus, vouchers unambiguously improve the efficiency with which education markets function in the United States.

Reference no: EM131734231

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