If labor supply is perfectly inelastic, the imposing a payroll tax that will be split between employers and employees will a) reduce employment. b) leave employment levels unchanged. c) cause the tax burden to fall exclusively on firms. d) cause the tax burden to fall exclusively on workers.

If labor supply is perfectly inelastic, the imposing a payroll tax that will be split between employers and employees will a) reduce employment. b) leave employment levels unchanged. c) cause the tax burden to fall exclusively on firms. d) cause the tax burden to fall exclusively on workers.

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter11: Labor Markets

Section: Chapter Questions

Problem 5SQ

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Question

If labor supply is perfectly inelastic, the imposing a payroll tax that will be split between employers and employees will

a) reduce employment.

b) leave employment levels unchanged.

c) cause the tax burden to fall exclusively on firms.

d) cause the tax burden to fall exclusively on workers.

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