Asked by
Natali Sanchez Sosa (Student)
on Dec 17, 2024
Verified
Taxes on labor taxes may distort labor markets greatly if
A) labor supply is highly inelastic.
B) many workers choose to work 40 hours per week regardless of their earnings.
C) the number of hours many part-time workers want to work is very sensitive to the wage rate.
D) "underground" workers do not respond to changes in the wages of legal jobs because they prefer not to pay taxes.
Labor Markets
Economic marketplaces where labor services are bought and sold, and wages, employment levels, and working conditions are determined.
Inelastic Supply
A situation where the quantity supplied of a good or service is relatively unresponsive to changes in its price.
Labor Supply
The total hours that workers in an economy are willing to work at a given real wage rate.
- Identify key characteristics of labor market responses to taxation.
Verified Answer
KS
Learning Objectives
- Identify key characteristics of labor market responses to taxation.