Under which of the following scenarios does an increase in the wage tax cause a drop in employment but no deadweight loss?
a.
When the wealth effect for workers is larger than the substitution effect.
b.
When the wealth effect for workers is smaller than the substitution effect.
c.
When the wealth effect for workers is equal to the substitution effect.
d.
It is possible under any of these scenarios.
e.
There is no scenario under which this is possible.

Question

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The Answer of Under which of the following scenarios does an increase in the wage tax cause a drop in employment but no deadweight loss?
a.
When the wealth effect for workers is larger than the substitution effect.
b.
When the wealth effect for workers is smaller than the substitution effect.
c.
When the wealth effect for workers is equal to the substitution effect.
d.
It is possible under any of these scenarios.
e.
There is no scenario under which this is possible.

Under Which of the Following Scenarios Does an Increase in the Wage