Let’s assume that the labor supply is perfectly inelastic, while demand is downward sloping. Im…

Let’s assume that the labor supply is perfectly inelastic, while
demand is downward sloping. Imposition of the tax on a firm will
lead to:

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A.

government revenue

B.

deadweight loss

C.

decrease in employment level

D.

A and B only

Let’s assume that the labor supply is perfectly inelastic, while
labor demand is downward sloping. Imposition of the tax on a firm
will lead to:

A.

decrease in employee’s net wage

B.

increase in cost of employees a worker for the firm

C.

increase in employment level

D.

A and B only

Economists typically estimate that the labor supply is
relatively_______ elastic than labor demand, hence employee will
pay_________ share of the payroll tax.

A.

more; larger

B.

less; larger

C.

more; smaller

D.

less; smaller