Author Question: What does empirical evidence suggest about the elasticity of labor supply? What does this suggest ... (Read 161 times)

rosent76 · **on:** Jun 29, 2018

What does empirical evidence suggest about the elasticity of labor supply? What does this suggest about the burden of the payroll tax in the United States?

What will be an ideal response?

Question 2

What are the tools that a country can use to restrict international trade?

What will be an ideal response?

amit · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

Empirical studies of labor supply behavior in the United States suggest that for most of the work force, the elasticity of labor supply is close to zero. Therefore, most of the payroll tax in the United States is probably borne by workers.

Answer to Question 2

A country can use tariffs, import quotas, other import barriers such as health, safety, and regulation barriers, and voluntary export restraints to restrict international trade. Export subsidies given by a nation decrease other countries' exports and thereby restrict their international trade.