In 2010 the federal government reduced the Social Security tax withholding rate from 12.4 percent (6.2 percent on both the employer and employee) to 8.4 percent (4.2 percent on both the employer and employee) on the wages of all workers. If the supply of labor is relatively inelastic when compared to the elasticity of the demand for labor, the burden of this tax will
a. continue to fall primarily on employees.
b. continue to fall primarily on employers.
c. be divided equally between employees and employers.
d. change from primarily falling on employees to employers.
A
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Generic drugs enter the pharmaceutical drug market once
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Suppose compensation is given by W = 500,000 + 200 ? + 17S, where W = total compensation of the CEO, ? = company profits (in millions) = $300, and S = sales (in millions) = $500. What percentage of the CEO's total earnings is tied to profits of the firm?
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