This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: How does a tax on labor income influence the equilibrium quantity of employment? What will be an ... (Read 13 times)

jhjkgdfhk

  • Hero Member
  • *****
  • Posts: 569
on: Jun 29, 2018
How does a tax on labor income influence the equilibrium quantity of employment?
 
  What will be an ideal response?

Question 2

Competitive market equilibrium is a market equilibrium with many buyers and sellers.
 
  Indicate whether the statement is true or false


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

wshriver

  • Sr. Member
  • ****
  • Posts: 318
Reply #1 on: Jun 29, 2018
Answer to Question 1

A tax on labor income drives a wedge between the after-tax wage rate of workers and the before-tax wage rate paid by firms. The tax on labor income decreases the supply of labor. That is, for each before-tax wage rate, workers provide a lower quantity of labor when faced with a tax that lowers their after-tax wage. The decrease in labor supply raises the before-tax wage rate, even though the after-tax wage rate received by workers falls. The decrease in labor supply also means that the quantity of employment at full employment (i.e., equilibrium employment in the labor market) falls.

Answer to Question 2

TRUE


jhjkgdfhk

  • Member
  • Posts: 569
Reply 2 on: Jun 29, 2018
:D TYSM

Viet Thy

  • Member
  • Posts: 329
Reply 3 on: Yesterday
Wow, this really help

« previous next »
 

Did you know?

The Centers for Disease Control and Prevention (CDC) was originally known as the Communicable Disease Center, which was formed to fight malaria. It was originally headquartered in Atlanta, Georgia, since the Southern states faced the worst threat from malaria.

Did you know?

The immune system needs 9.5 hours of sleep in total darkness to recharge completely.

Did you know?

The Centers for Disease Control and Prevention has released reports detailing the deaths of infants (younger than 1 year of age) who died after being given cold and cough medications. This underscores the importance of educating parents that children younger than 2 years of age should never be given over-the-counter cold and cough medications without consulting their physicians.

Did you know?

Warfarin was developed as a consequence of the study of a strange bleeding disorder that suddenly occurred in cattle on the northern prairies of the United States in the early 1900s.

Did you know?

Vampire bats have a natural anticoagulant in their saliva that permits continuous bleeding after they painlessly open a wound with their incisors. This capillary blood does not cause any significant blood loss to their victims.

Stages of Labor Stages of Labor
Many Factors Influence Your Food Choices Many Factors Influence Your Food Choices
Income per Capita versus Income of the Bottom Quintile Income per Capita versus Income of the Bottom Quintile
Relationship between Income Inequality and Sociopolitical Instability Relationship between Income Inequality and Sociopolitical Instability
Variable and absorption costing, explaining operating-income differences. Variable and absorption costing, explaining operating-income differences.
The Hardy–Weinberg Equilibrium The Hardy–Weinberg Equilibrium
Video: Hershey Chase Experiments

For a complete list of videos, visit our video library