Question 1
Empirical studies of labor supply behavior in the United States suggest that the elasticity of labor supply is ________ and therefore most of the payroll tax in the United States is borne by workers.
◦ negative
◦ close to zero
◦ unit elastic
◦ almost perfectly elastic
Question 2
Owners of partnerships
◦ must pay the corporate profits tax.
◦ report their firms' income directly on their individual income tax returns.
◦ must pay the corporate profits tax as well as report their firms' income directly on their individual income tax returns.
◦ are not subject to paying any taxes on their firms' income.
