Explain in brief about the impact of such a tax on workers


The impact of payroll tax on workers and employers.

Assume the government implement a payroll tax on all employers. Please draw and explain in brief about the impact of such a tax on workers and employers for the following cases

i) Labor supply curve is perfectly inelastic

ii) Labor supply curve is unit elastic (i.e. upward sloping)

In which case would the dead weight loss be higher?

 

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Business Economics: Explain in brief about the impact of such a tax on workers
Reference No:- TGS019719

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