If Labor Is Supplied Perfectly Inelastic, the Imposition of a Payroll

question 29

Multiple Choice

If labor is supplied perfectly inelastic, the imposition of a payroll tax legislated to be paid by firms will do all of the following except:

• A)reduce the wage rate by exactly the amount of the tax.
• B)leave employment levels unchanged.
• C)leave firm profits unchanged.
• D)reduce total output.
• E)generate tax revenue paid to the government.

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Definitions:

Jobs

Positions of employment within organizations or industries where individuals perform specific roles and tasks in exchange for compensation.

Intrinsic Motivation

The motivation to participate in activities purely for the enjoyment and fulfillment obtained from the activity itself, rather than for any external incentives.

Extrinsic Motivation

Incentive that is fueled by outside gains like financial earnings, recognition, academic achievement, and commendation.

Performance

The level of achievement or output produced by an individual, group, or system.