The Social Security tax is a tax that Congress imposes equally on both employers and employees. Does this mean that the burden of this tax is shared equally between firms and workers? Explain
What will be an ideal response?
No. A tax has the same effect regardless of whether it's imposed on buyers (employers) or sellers (employees). The division of the burden of a tax between firms and workers depends on the elasticities of labor demand and labor supply, not on the tax law. That is, the market for labor, not Congress, decides how the burden of the Social Security tax is divided by firms and workers.
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A program of protection that results in preserving jobs in certain industries
a. raises average productivity in all sectors of the economy. b. does so at very high cost to consumers of the products from those industries. c. is an efficient way to preserve employment, and is cheaper than other forms of maintaining full employment. d. is an effective way of encouraging innovation and improvement in production.
Which of the following is a true statement?
a. A price-taker firm can sell additional units of output without having to lower its price, while a price-searcher firm must lower its price in order to sell additional units. b. A price-searcher firm can sell additional units of output without having to lower its price, while a price-taker firm must lower its price in order to sell additional units. c. Both price searchers and price takers can sell additional units of output without having to lower their price. d. Both price searchers and price takers must lower their price in order to sell additional units of output.