Employers withhold several taxes from employees ' paychecks, one of which is FICA. Congress requires employers to pay half of the FICA tax and workers to pay the other half
Does this mean that the burden of the FICA tax falls evenly on employers and employees? Briefly explain.
Most economists believe that even though employers and employees each pay half of the FICA tax, the burden of the tax falls almost entirely on employees. The forces of demand and supply working in the labor market determine the incidence of the tax, not Congress, so even though the tax is paid evenly by employers and employees, this does not mean that the burden is shared equally.
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A good for which demand decreases when income increases is known as a(n) ________ good
A) normal B) inferior C) substitute D) complementary
Hardcover books usually cost much more to purchase than do otherwise identical paperback editions of the same book because
A) hardcover books typically last longer. B) the demand for hardcover books is typically less elastic than the demand for paperback books at the same price. C) the marginal cost of producing hardcover books typically rises as output increases. D) the marginal cost of producing paperback books typically falls as output increases. E) the mergers in the book-publishing industry have encouraged price discrimination.