An Increase in Taxes on Labor Earnings,everything Else Equal

question 3

Multiple Choice

An increase in taxes on labor earnings,everything else equal

• A)shifts the labor supply curve to the left and increases the real wage.
• B)shifts the labor supply curve to the right and increases the real wage.
• C)shifts the labor supply curve to the right and reduces the real wage.
• D)shifts the labor supply curve to the left and reduces the real wage.

Understand the concepts of elasticity of demand and supply

Recognize factors determining whether demand or supply for a product is elastic or inelastic

Identify how changes in price affect total revenue depending on the elasticity

Understand the short-run and long-run adjustments in the market and their effects on elasticity

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