Explain how the burden of a payroll tax changes if labor supply is relatively inelastic? Explain how your answer would change if labor supply is relatively elastic?
What will be an ideal response?
Workers bear the bulk of the burden of a payroll tax if labor supply is relatively inelastic. However, firms bear the bulk of the burden of payroll tax if labor supply is relative elastic.
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
The tax elasticity of supply measures the
A. Response of quantity supplied to a change in the tax rate. B. Response of employers to a change in the tax rate. C. Change in the amount of taxes workers must pay when tax rates change. D. Response of workers to a change in prices.
In a market, the marginal buyer is the buyer
a. whose willingness to pay is higher than that of all other buyers and potential buyers. b. whose willingness to pay is lower than that of all other buyers and potential buyers. c. who is willing to buy exactly one unit of the good. d. who would be the first to leave the market if the price were any higher.
The tragedy of the commons is a widely used model often referred to in discussions about
a. space and ocean exploration. b. lack of scientific research. c. air and water pollution. d. shared natural resources.