Suppose That Taxes on Labor Are Increased by 10 Percent

question 37

Multiple Choice

Suppose that taxes on labor are increased by 10 percent and workers respond by working 2 percent fewer hours.It can be said that

• A)The tax elasticity of the labor supply is 0.2.
• B)The labor supply is elastic.
• C)Employers will face lower unit costs for each worker hired.
• D)The tax elasticity of the labor supply is 5.

---

Definitions:

Aerobic Respiration

A metabolic process that uses oxygen to convert nutrients into energy, producing carbon dioxide and water as waste products.

Electron Transport Chain

A series of protein complexes located in the inner membrane of mitochondria or the thylakoid membrane of chloroplasts, involved in producing ATP through the process of oxidative phosphorylation.

ATP

Adenosine Triphosphate, a molecule that carries energy within cells, facilitating various cellular processes.

Alcoholic Fermentation

A biological process in which sugars such as glucose, fructose, and sucrose are converted into cellular energy and thereby produce ethanol and carbon dioxide as byproducts.