Faced with a shortage of funds to pay claims, the workman's compensation systems in many states have been forced to raise the workman's compensation tax rate substantially. The tax is paid by employers. Employers have complained that they cannot afford the tax and threaten to go out of business. Assuming the supply of labor is very inelastic, one can argue that ultimately the burden of this tax
actually will rest
a. mostly on workers.
b. mostly on employers.
c. about 50/50 on workers and employers, like the Social Security tax.
d. all on employers by statute.
a
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The price elasticity of demand is measured by the
A) percentage change in quantity demanded divided by the percentage change in price. B) percentage change in price divided by the percentage change in quantity demanded. C) change in quantity demanded divided by the change in price. D) change in price divided by the change in quantity demanded.
Refer to the diagram. All other things equal, curve C:
A. reflects increasing opportunity costs because the slope of the curve becomes less steep as
one moves down along the curve.
B. is a less desirable production possibilities curve for an economy than curve B.
C. is a more desirable production possibilities curve for an economy than curve A.
D. has a steeper slope throughout than curve B.