-In the labor market shown in the graph,the government introduces a 10 percent income tax.The employer pays ________ cents of the tax and the employee pays ________ cents of the tax.

Question

Quizplus · Accepted Answer

The division of the tax burden between employer and employee depends on the elasticities of supply and demand in the labor market. Without the specific graph and its details, a general principle is that both parties share the tax burden, but the exact split can vary. Option D suggests a near-even split, which is plausible in many scenarios where neither the supply (workers) nor the demand (employers) is perfectly inelastic or elastic.

-In the Labor Market Shown in the Graph,the Government Introduces