When a Payroll Tax Is Enacted

question 244

Multiple Choice

When a payroll tax is enacted,

• A) the wage received by workers falls and the wage paid by firms rises.
• B) the wage received by workers falls and the wage paid by firms falls.
• C) the wage received by workers rises and the wage paid by firms falls.
• D) the wage received by workers rises and the wage paid by firms rises.

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Definitions:

Variable Expenses

Expenses that vary depending on the amount of products made or the volume of sales transactions.

Break-even Point

The level of production or sales at which a business's revenues equal its expenses, resulting in neither profit nor loss.

Fixed Expenses

Costs that do not change in total with variations in the volume of activity, such as rent, salaries, and insurance.

Selling Price

The price at which a product or service is offered to consumers.