Suppose the government imposes a tax on labor income. Which of the following describe the effect of the tax in the labor market? If the demand for labor is more elastic than the supply, workers will i. bear more of the tax. i. Employment is not affected because workers need jobs. ii. The tax creates a deadweight loss. Selected Answer: ii only Answers: ii only i and i only ii and ii ii only i, i and ii

Question

Can you explain why I got this wrong? I thought that if the supply was more inelastic then the employers would bear more of the tax? Im confused. 

Suppose the government imposes a tax on labor income. Which of the
following describe the effect of the tax in the labor market?
If the demand for labor is more elastic than the supply, workers will
i.
bear more of the tax.
i. Employment is not affected because workers need jobs.
ii. The tax creates a deadweight loss.
Selected Answer:
ii only
Answers:
ii only
i and i only
ii and ii
ii only
i, i and ii
Expand
Transcribed Image Text

Suppose the government imposes a tax on labor income. Which of the following describe the effect of the tax in the labor market? If the demand for labor is more elastic than the supply, workers will i. bear more of the tax. i. Employment is not affected because workers need jobs. ii. The tax creates a deadweight loss. Selected Answer: ii only Answers: ii only i and i only ii and ii ii only i, i and ii

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Economics

Related Economics Q&A

Find answers to questions asked by students like you.

Q: Built-in Stability a.Explain the difference between discretionary and non-discretionary fiscal poli...

A: Click to see the answer

Q: Savings, Investment, and the Financial System - End of Chapter Problems 1. Given the following infor...

A: Given – GDP = $1400M , T = $310M , C = $840M , G= $280M (M=million)For closed economy:GDP = C + I + ...

Q: Savings, Investment Spending, and the Financial System- End of Chapter Problems 16. Sallie Mae is a ...

A: a) Sallie Mae has engaged in securitization which is her packaging process. Because the likelihood t...

Q: Calculate the loss in producer surplus of the price fall to $12, due to   Some producers leave the...

A: The producer surplus is the difference between the actual market price of a good and the lowest pric...

Q: Which of the following options do you favor for resolving future Social Security deficits?  What are...

A: Options that favors resolving future Social Security deficits are:a)Cutting Social Security benefits...

Q: [Indifference Curves] Consider the utility function U(C1, C2) and B 1 In(C1)BIn(C2) 1. Using a progr...

A:  The given equation is : U=ln(C1) + Bln(C2)We know, ln(C1) + ln(C2) = ln(C1*C2)

Q: National defense is a good that is nonexcludable and nonrival in consumption. Suppose that instead o...

A: Given,Total number of Latvian citizens = 10The amount, each citizen should pay is $10The value of ev...

Q: Consider the following population in our sample town. a) How many people in this population accordin...

A: Answer -  By the definition of  Unemployment - A person is defined as unemployed if  they are jobles...

Q: Does the US import more ($ value) than it exports or does the US export more than it imports? Is thi...

A: The US imports more than it exports. In 2018, the US exports were, $2.5 trillion and US imports were...

Q: Using the aggregate demand and aggregate supply model, explain the effects of the following on price...

A: The AD-AS framework explains the relationship between price level and output produced in the economy...

Q: Why do economists and managers pay attention to the measurements of macroeconomic activity? several ...

A: Answer -  Economist and managers pay attention to many measurment of macroeconomics activity " GDP g...

Q: Number 6a, 6b, 6c

A: a.There are two firms for the production of the airplane and the payoffs of the players are given. F...

Q: In Goa, India, the multiplier effect of iron ore exports is calculated to be 1.62 (Ta, 2003). Calcul...

A: As the multiplier effect is calculated as 1.62, So the impact of additional 1,000 rupees of iron ore...

Q: Which of the following would both make the interest rate on a bond higher than otherwise?   a. t...

A: To make the interest rate on a bond higher than otherwise.

Q: the supply of labor will not change if all prices and wage rates by the same percentage is it true o...

A: The supply of labor will not change if all prices and wage rates by the same percentage  – False

Q: Suppose the town of Boone has a total population of 50,000 people. Of those, 45,000 people are emplo...

A: Total Population = 50000 peopleEmployed = 45000 peopleStudents = 1000 peopleTherefore, people who ar...

Q: Economics Question

A: If the technology improves, while all other factors remain constant, it would lead to the shift in t...

Q: Briefly explain what effect and why, a slowdown in Technological progress would have on the Aggregat...

A: A slow down in technological progress would affect the aggregate supply as it is directly related to...

Q: Suppose that Timmy lives in a neighborhood where graffiti is common. People's cars and the sides of ...

A: Externalities occur when the action(s) of an individual or a firm affects other individuals/firms an...

Q: Molly loves hamburgers and soft drinks, but insists on consuming exactly one soft drink for every tw...

A: Molly consumes 2 hamburgers with 1 soft drink. They both are complimentary goods for her.The graph o...

Q: Calculate the change in the share of employment by education levels between January 1992 and January...

A: The percentage change can be calculated by:

Q: xfo LU.S ory Bookmarks People Window Help C Fill In The Blanks: Price Level C Fill In The Blanks: Re...

A: Quantity theory of money states that the quantity of money and price level exhibits a direct relatio...

Q: In January, the interest rate is 5 percent and firms borrow $ 50 billion per month for investment pr...

A: Crowding out effect is a scenario in which a increase in the interest rate leads to a fall in the in...

Q: Does an in income always shift income demand carves (for goods) to the right? why or why not?

A: To determine the impact of a change in income on the demand curve.

Q: Suppose you are given the following data for a small economy: Number of unemployed workers: 1,000,0...

A: Answer -No. of unemployed workers = 1,000,000Labor Force = 10,000,000Part (a)-Answer - Unemployment ...

Q: Sleek sneakers is one of many firms in the market for shoes. a. Assume that sleek is currently earni...

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and s...

Q: Consider an economy in which the demand for money is of the formMt =(1/v) PtYfor t = 0, 1, 2, · · · ...

A: Given: Mt= (1/v) PtYY= 150, v= 1.5, Money supply = 100 for t=0,1

Q: What happens to each sector of the economy when recession occurs?

A: The recession can be defined as a phase in the business cycle which characterised by a general slowd...

Q: Consider an economy in which the demand for money is of the formMt =1/(bar over v)PtYfor t = 0, 1, 2...

A: Given: Mt= (1/v) PtYY= 150, v= 1.5, Money supply = 100 for t=0,1

Q: Suppose the California legislature passed a sweeping law to lower the number of regulations for buil...

A: Click to see the answer

Q: Question 14 Consider a newspaper with production function f(L,K)= 4min{L,K}, where L is the units of...

A: The production function is shown in white board.f (L, K) = 4 min {L, K}Where, L is the units of labo...

Q: CENGAGE MINDTAP Assignment 8 (Ch 14) 1 + 0 0 1 2 3 4 5 6 7 8 9 10 QUANTITY (Millions of small boxes)...

A: As the equilibrium price is given to be $5, so we take $5 price for each unit.Total Revenue = Price ...

Q: 4.5 same thing as 4.4  how do i show this with little information they gave me

A: An increase in government spending will tend to reduce Public Saving which will in turn reduce the N...

Q: For each government action, indicate the type of government activity and justification. Instructions...

A: a) New York city bans smoking in restaurants – EXTERNALITY.  Smoking in public places creates negati...

Q: 9.Fiscal policy can be called on to correct conditions of recession and inflation.  a.List and expla...

A: Click to see the answer

Q: how higher saving in a country leads to a higher growth rate in that country.

A: Click to see the answer

Q: a. Suppose a certain bank has $5M in capital, demand deposits totaling $40M, holds 15% reserves, and...

A: A certain bank has $5M in capital, demand deposits of $40M, holds 15% reserves (that is 15 % reserve...

Q: In context of international trade, explain import-substitution and export-promotion policies.  Which...

A: Globalization means integrating an economy with the world economy. Globalization promotes internatio...

Q: 1.  Suppose you are given the following data for a small economy: Number of unemployed workers: 1,0...

A: The unemployment rate shows the proportion of the labor force that is unemployed. It is calculated b...

Q: A manufacturer of scrapbook kits has a fixed cost of $30,000. This manufacturer expects to sell 6,00...

A: Given:Fixed Cost: $30,000Expected Quantity to be sold = 6000 unitsSelling Price = $17.5Mark Up is 20...

Q: The graph shows the relevant curves in the paper production market Social MC In the absence of gover...

A:  In the absence of government intervention, the market supply curve is the private MC curve as the f...

Q: 7. LO 2, 4 Suppose that a consumer can earn a higher wage rate for working overtime. That is, for th...

A: Let the consumer has two goods to consume, consumption (C) and leisure (l). The consumer’s budget co...

Q: What are some of the major trading regions?

A: To identify some of the major trading regions.

Q: Which of the following options do you favor for resolving future social security deficits? What are ...

A: Options that favors resolving future Social Security deficits are:a)Cutting Social Security benefits...

Q: Why doesn’t the change to equilibrium happen immediately when there is surplus in the market?

A: Demand: It refers to the quantity of a commodity that the consumer is willing and able to purchase a...

Q: Which of the following is a true statement about the difference between a price-taker firm and a com...

A: A price taker firm is the firm which takes the prevailing market price of a service or good as given...

Q: 8. The effects of property rights on achieving efficiency Consider a lake found in the village of St...

A: Total profit of Tannery and Hiking Lodge is shown below.

Q: 1. Draw how the burden of the tax is distributed under the following scenarios: a) Inelastic demand ...

A: a) Inelastic demand and elastic supply:In this case, the initial equilibrium is at e at price P and ...