If demand is unit elastic and the labor supply is ________, the payroll tax is borne mostly by the employee.

Name: If demand is unit elastic and the labor supply is ________, the payroll tax is borne mostly by the employee.
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Question

Quizplus · Accepted Answer

When the labor supply is very inelastic, workers are less responsive to changes in wages, meaning they are more likely to bear the burden of a payroll tax, as their willingness or ability to reduce labor supply in response to the tax is limited.

If Demand Is Unit Elastic and the Labor Supply Is