-In the labour market shown in the above graph, the government introduces a 10 per cent income tax. The employer pays ________ cents of the tax and the employee pays ________ cents of the tax.

Question

Quizplus · Accepted Answer

The distribution of the tax burden between employer and employee depends on the elasticities of supply and demand in the labor market. Without seeing the graph, a general principle is that the party (employer or employee) with the more inelastic curve will bear a larger share of the tax burden. However, without specific details from the graph, it's impossible to accurately determine the exact distribution. The choice provided (B) suggests a specific distribution of the tax burden, but please note this answer is based on the assumption that choice B was indicated as correct without the ability to verify against the graph.

-In the Labour Market Shown in the Above Graph, the Government