Question 1
When the labor supply is very inelastic, the payroll tax is
◦ borne mostly by the employer.
◦ borne entirely by the employer.
◦ borne mostly by the employee.
◦ split fairly evenly between the employer and the employee.
Question 2
Employers will bear the full burden of the payroll tax if labor supply is
◦ perfectly inelastic.
◦ perfectly elastic.
◦ backward bending.
◦ upward sloping.