The above figure shows supply and demand curves for apartment ...

[Marty]

The above figure shows supply and demand curves for apartment units in a large city. If the city government passes a law that establishes 350 per month as the legal maximum rent, consumer surplus will be
 
  A) a.
  B) a + b + f.
  C) a + b + c.
  D) a + b + c + f + g.

Question 2

Half of Social Security taxes are paid by the employer and half are paid by the employee. What would happen if the employer was made to pay the entire amount? Explain your reasoning.
 
  What will be an ideal response?

[Shshxj]

Answer to Question 1

C

Answer to Question 2

While the statutory requirement would change, nothing of economic importance would change. Since employers care about the costs of each employee (including taxes) and employees care about after-tax wages, nothing of relevance should change except the nominal wage paid by the employer will rise to reflect the tax now being paid by the employer. The after-tax wage of the employee will remain the same, however.

[Marty]

Thank you

[Shshxj]

Happy to help you