If labor supply is very elastic, the payroll tax is
A. borne mostly by the workers.
B. split evenly between the employer and the workers.
C. borne mostly by the employer.
D. borne entirely by the employer.
Answer: C
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In the above figure, Mark's monthly budget line for movies and plays changed, as shown by the arrow. The change was caused by
A) a decrease in Mark's income. B) an increase in Mark's income. C) a fall in the price of a play. D) a rise in the price of a play.
Jill, a bookkeeper just received an attractive offer from an outside firm. Her opportunity cost, of staying in her current position has
a. Increased b. Decreased c. Not changed d. All of the above
If a professional organization imposes strict licensing procedures that increase entry costs for new members, then labor
a. supply will fall, and the equilibrium wage rate will rise b. supply will fall, and the equilibrium wage rate will fall c. supply will rise, and the equilibrium wage rate will fall d. demand will rise, and the equilibrium wage rate will rise e. demand will rise, labor supply will fall, and the equilibrium wage rate will rise
The price is likely to be quite stable in the godfather model because
a. the market functions like a cartel b. the other firms in the industry have cost advantages over the godfather c. the godfather could decrease price below levels that other firms could afford d. entry into the market is easy e. all firms are maximizing profit anyway