The income effect on labor supply is likely to be a. small because most people don't have the ability to change labor supply on the intensive margin b. large because most people can change labor supply on the intensive margin c. large because tax changes create significant labor supply changes at both the intensive and the extensive margin d. small because regulations prevent people from entering the labor force

The income effect on labor supply is likely to be a. small because most people don't have the ability to change labor supply on the intensive margin b. large because most people can change labor supply on the intensive margin c. large because tax changes create significant labor supply changes at both the intensive and the extensive margin d. small because regulations prevent people from entering the labor force

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter11: Labor Markets

Section: Chapter Questions

Problem 2SQP

See similar textbooks

Related questions

Q: Tax incidence is the division of the burden of a tax between the A. society; seller B. buyer; seller…

A: Tax is a compulsory payment made by the individual, or company to the government as revenue to carry…

Q: When economists say that the demand for labor is a derived demand, they mean that it is... A.…

A: Derived demand is the demand that is seen in the case of complementary goods where the increase in…

Q: Can you explain why I got this wrong? I thought that if the supply was more inelastic then the…

A: If the government imposes tax on labor income, the labor market would be affected. The supply of…

Q: Why we should know about the issue of the impact of the minimum wage of the labor market?

A: The lowest remuneration level that employers could be paying their employees legally and is…

Q: The federal government currently levies a 15.3 percent payroll tax (7.65 percent on both the…

A: Answer: A (fall primarily on employees) Explanation: The burden of the tax falls more on employees…

Q: Suppose in market for truck drivers, the labour demand curve is W = 10 – 2L and labour supply curve…

A: The labor curve reflects the number of employees who are willing and able to work at different…

Q: How do mandated benefits affect labor market outcomes? Why do these outcomes differ from those…

A: Answer - Mandated benefits :- Mandated benefits affect the labor market in positive way as mandated…

Q: Refer to the graph shown. Assume the market is initially in equilibrium at point j in the graph but…

A: Consumer surplus is the ratio below the demand curve and above the market price. It arises when…

Q: 1. A government economist, Mollie Orshanky, first calculated this in 1963 by multiplying the cost of…

A: Correct answer is d. poverty line Poverty line is a minimum earning threshold below which a person…

Q: "How can the US government use taxation to encourage income equality?"

A: An income equality refers to an uneven distribution of the income throughout a population, groups,…

Q: Poverty Trap 7. The American Poverty Trap is a phrase used to describe the tendency for individuals…

A: In America, the unemployed have various benefits including the unemployment benefits. Once the…

Q: None

A: FEEL FREE TO ASK FOR CLARIFICATIONS

Q: On a graph of the labor market, show the effects of an increase in the payroll tax

A: A labor market is a place where labor services are exchanged for wages. It is a market of demand and…

Q: What is the link between marginal revenue product and wages? Does this notion of marginal revenue…

A: Minimum wage laws are the laws formed by the government of a nation which direct employers to…

Q: Minimum wage is an example of what kind of economic

A: Minimum wage means the minimum amount of wage/remuneration that an employer is required to pay to…

Q: A new elected government want to reform its tax system. As an economist you are hired to advise the…

A: When a taxing body, typically a government, levies or imposes a financial responsibility on its…

Q: Describe the impact of a payroll tax on wages and employment in a competitive industry. Why is part…

A: Payroll taxes are used in most developed and developing countries in the form of mandatory…

Q: This question requires three answers. What happens to each welfare component when an excise tax is…

A: A direct tax is one that is paid directly to the institution that imposed it. Individual taxpayers,…

Q: Allison is debating about hireing Jim for a new Position at her firm producing computer software.…

A: Note:- Since we can only answer up to three subparts, we'll answer the first three. Please repost…

Q: In New York workers face a state income tax rate of about 6.5%. In addition, workers who reside in…

A: City tax is levy for utility service provided by government like police service , garbage cleaning…

Q: What are the welfare effects of a binding minimum wage? Use a graphical approach to show what…

A: Answer in step 2.

Q: An effective minimum wage imposes a price ceiling on the wages of various categories of low-skill…

A: Minimum wages have been defined as “the minimum amount of remuneration that an employer is required…

Q: Minimum Wages and Unions Assume an industry without legal minimum wages and unions. Show in a…

A: The minimal amount of remuneration that an employer is compelled to pay wage earners for the job…

Q: Use a diagram to explain the impact of the imposition of a minimum wage above the equilibrium wage…

A: If the minimum wage is above the equilibrium level, then the laborers will be interested more in…

Q: Using a regular labor supply curve instead of a compensated supply curve to calculate the excess…

A: Compensated Supply Curve:A compensated supply curve considers how individuals adjust their supply of…

Question

The income effect on labor supply is likely to be

a. small because most people don't have the ability to change labor supply on the intensive margin

b. large because most people can change labor supply on the intensive margin

c. large because tax changes create significant labor supply changes at both the intensive and the extensive margin

d. small because regulations prevent people from entering the labor force

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

no handwriting, please Illustrate and carefully explain the impact of an increase in the income tax ratefrom 25 percent to 35 percent on the demand for labour, supply of labour,equilibrium wage and level of employment.
Illustrate and carefully explain the impact of an increase in the income tax rate from 25percent to 35 percent on the demand for labour, supply of labour, equilibrium wage and level of employment.
New Zealand along with many other countries nas a progressive tax system. What is a proaressive tax system! What effect can a progressive tax system have on work incentives? Explain why.
Illustrate and explain the impact of a minium wage on the labour market
Only typed answer
If the tax elasticity of labor supply is 0.24, by what percentage will the quantity of labor supplied increase in response to a. a $500 per person income tax rebate?multiple choice A 4.8 percent increase A 1.2 percent increase No increase A 2.4 percent increase b. a 9 percent reduction in marginal tax rates? %
Consider a perfectly competitive labor market with a very inelastic supply of labor. If a payroll tax is implemented, who would bear a larger portion of the tax burden? a.Mostly by the employer. b.Mostly by the employee. c.Split fairly evenly between the employer and the employee.
If government spending is paid for with lump-sum taxes, then in the competitive equilibrium: MRSI.C = MRSCI MRTI,c# MPN MRT,C = MRS,C MPN + W
There is a disscusiion that: how a labor market equilibrium changes when the government man-dates an employee benefit for which the cost exceeds the worker’s valuation and for which the cost equals the worker’s valuation. Use a graph to illustrate how the labor market equilibrium changes when the cost of the mandated benefit is lower than the worker’s valuation. Is there deadweight loss associated with the mandated benefit in this case?
Typed plz and asap thanks
In a competitive labor market, when the governmentincreases the minimum wage, the resul t is a(n)____ in t he quantity of labor suppl ied and a(n)____ in t he qua ntity of labor demanded.a. increase, increaseb. increase, decreasec. decrease, increased. decrease, decrease
Suppose in market for truck drivers, the labour demand curve is W = 10 – 2L and labour supply curve is W = 2 + 2L. Suppose government requires employers pay $10 per driver that it will use to finance certain government programs for truck drivers. a. What is the effect of this policy on the market for truck drivers? b. How is the incidence of this tax distributed between employers and employees? Will this distribution change if the tax fell to $5? Explain. c. What is the net gain or net loss to the society from a $10 tax? Will this net gain or net loss change if the subsidy per worker fell to $5? Explain.