Answer: (E)
The tax burden shall be decided based on the price elasticity of demand and supply.
high elasticity of supply of labor, more burden shall be more demanders but if demand more labor elastic, more burden shall be faced by the workers.
the imposition of tax reduces the equilibrium labor, thus deadweightloss is created.
Suppose the government imposes a tax on labor income. Which of the following describe the effect...
Please answer why the answer is that answer Suppose the government imposes a tax on heating oil. The deadweight loss from this tax will likely be greater in the (a) first year than in the fifth year because demand and supply will be more elastic in the first year than in the fifth year. (b) first year than in the fifth year because demand and supply will be less elastic in the first year than in the fifth year. (c)...
Suppose that before any tax on labor income, the equilibrium wage in a market is $10 per hour. Once the government imposes a $3 per hour tax on labor income, the equilibrium wage rises to $11 per hour. What does that reveal about the elasticities of supply and demand for labor? A) Demand is more elastic than supply. B) Both the supply and demand are inelastic. C) Supply is more elastic than demand. ...
Attempts: Average: /2 4. Problems and Applications Q4 Suppose that the government imposes a tax on heating oil True or False: The revenue collected from this tax would likely be larger in the first year after it is imposed than in the fifth year. True False True or False: The deadweight loss from this tax would likely be smaller in the fifth year after it is imposed than in the first year as demand for heating oil become more elastic....
Consider the market for labor, pictured above. Suppose the government imposes a tax of $2000 per year on firms wishing to hire workers. What is the new level of employment (i.e. number of workers in the new equilibrium)?
11. The goals of optimal income taxation include all of the following EXCEPT: a. maximizing tax revenue. b. minimizing the distortions due to taxation. c. maximizing the nation's social welfare function. d. achieving vertical equity. 12. Suppose that the elasticities of demand for apples, bananas, and peaches are –0.9, –1.6, and –0.8, respectively. Assume that all else is identical in these three products and that an identical tax is levied on each good. Rank the products from highest to lowest...
Labor supply = -300 + 30W and Labor Demand = 700-50W c) Suppose the government imposes a wage floor of $15 in this market. Will be there be a surplus or shortage of workers, and of what magnitude (how many workers)? Surplus or shortage: Magnitude of surplus or shortage
Consider the market for labor, pictured above. Suppose the government imposes a tax of $2000 per year on firms wishing to hire workers. What is government tax revenue?
Consider the market for labor, pictured above. Suppose the government imposes a tax of $2000 per year on firms wishing to hire workers. What is the firms' surplus with the tax? HINT: Remember, the firms are buying labor here - they are the CONSUMERS. Workers are SELLING their labor, they are the producers.
Suppose Hong Kildong, the King of Yuldo, imposes an additional payroll tax on the government employees. (We know Hong Kildong does not like the governmental officials.) He decides to throw the additional tax revenue into the East Sea near Dokdo as he believes that the only purpose of the tax is to penalize the government employees. Assume that there are only two sectors (Governmental and non-governmental sectors) and two perfectly mobile factors (capital and labor), and that all the productivity...
Now suppose that the government imposes a $2 tax per case on the sellers of microwave popcorn. The graph below shows the effects of this tax. Supply Demand 100 200 300 400 500 600 700 800 900 Quantity Using the information in the graph above, identify each of the following (after the tax is imposed): e. the new equilibrium price and quantity f. price paid by buyers g. price received by sellers h. consumer surplus i. producer surplus j. government...