Half of Social Security taxes are paid by the employer and half are paid by the employee. What would happen if the employer was made to pay the entire amount? Explain your reasoning
What will be an ideal response?
While the statutory requirement would change, nothing of economic importance would change. Since employers care about the costs of each employee (including taxes) and employees care about after-tax wages, nothing of relevance should change except the nominal wage paid by the employer will rise to reflect the tax now being paid by the employer. The after-tax wage of the employee will remain the same, however.
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Allocative efficiency occurs only at that output where
A. the areas of consumer and producer surplus are equal. B. marginal benefit exceeds marginal cost by the greatest amount. C. the combined amounts of consumer surplus and producer surplus are maximized. D. consumer surplus exceeds producer surplus by the greatest amount.
In general, a fine on buying a product leads to the
A) supply curve shifting rightward. B) supply curve shifting leftward. C) demand curve shifting rightward. D) demand curve shifting leftward.
Aid to Families with Dependent Children was a government program with the goal of:
A. redistribution. B. social insurance. C. economic growth. D. None of these is true.
A basic problem with the infant-industry argument is that:
A. most industries need protection when they are mature, not when they are first established. B. the amount of the tariff is unlikely to have much impact on the success of an infant industry. C. political pressure will likely prevent the withdrawal of the tariff when the industry matures. D. domestic consumers will continue to buy the foreign products anyway, regardless of the tariff.