Asked by Angel Jordan on Jun 18, 2024
Verified
Concerning the labor market and taxes on labor, economists disagree about
A) the size of the tax on labor.
B) the size of the deadweight loss of the tax on labor.
C) whether or not a tax on labor places a wedge between the wage that firms pay and the wage that workers receive.
D) nothing.
Deadweight Loss
The loss of economic efficiency that occurs when the optimal level of supply and demand is not achieved.
Labor Market
The demand and supply of labor, in which individuals look for jobs and employers search for employees.
- Determine the primary aspects of labor market responses towards taxation.
- Examine the effects of tax regulations on the conduct of economic participants.
Verified Answer
NS
Naved SulaimanJun 19, 2024
Final Answer :
B
Explanation :
Economists often disagree about the size of the deadweight loss of the tax on labor because it depends on the elasticity of supply and demand for labor, which can vary widely across different markets and conditions.
Learning Objectives
- Determine the primary aspects of labor market responses towards taxation.
- Examine the effects of tax regulations on the conduct of economic participants.