Question :
63) Consider a Social Security tax workers versus a Social : 1241620
63) Consider a Social Security tax on workers versus a Social Security tax on employers. In comparing the outcomes of each type of tax, we see that
A) workers receive a higher take-home wage when the tax is imposed on employers than when the tax is imposed on workers.
B) workers receive the same take-home wage when the tax is imposed on workers and when the tax is imposed on employers.
C) employers pay a lower total wage when the tax is imposed on workers.
D) employment decreases by more when the tax is imposed on employers than when the tax is imposed on workers.
E) employment decreases by more when the tax is imposed on workers than when the tax is imposed on employers.
64) If Congress wanted to change the Social Security tax so that firms paid most of the tax, they would need to
A) change the tax laws so that all of the Social Security tax was imposed on firms.
B) change the tax laws so that all of the Social Security tax was imposed on workers.
C) change the tax laws so that more than 50 percent of the Social Security tax was imposed on firms.
D) change the tax laws so that more than 50 percent of the Social Security tax was imposed on workers.
E) None of the above because the incidence of the Social Security tax does not depend on the tax laws but instead depends on the elasticities of the demand for labor and the supply of labor.
65) For 2011, the federal government reduced the Social Security tax on workers by 2 percentage points. This will likely cause
A) an increase in the quantity of workers employed and a decrease in deadweight loss.
B) an increase in the quantity of workers employed and an increase in deadweight loss.
C) a decrease in the quantity of workers employed and a decrease in deadweight loss.
D) a decrease in the quantity of workers employed and an increase in deadweight loss.
E) no change in the quantity of workers employed since the demand for labor is more elastic than the supply of labor.
66) In 2010, Social Security taxes of over 11 percent were imposed on all income up to $104,000. For income that exceeded $104,000, no Social Security tax was imposed. Hence the Social Security tax is a
A) progressive tax.
B) proportional tax.
C) regressive tax.
D) fair-incidence tax.
E) type of tax that is impossible to determine without more information.
67) The percentage of an additional dollar of income that is paid in tax is the
A) sales tax.
B) capital tax.
C) marginal tax rate.
D) personal income tax.
E) regressive tax.
68) If the average tax rate is constant as income increases, then the tax is called
A) regressive.
B) progressive.
C) proportional.
D) an average tax.
E) efficient.
69) A tax on labor income
A) increases the quantity employed because the demand for labor increases.
B) decreases the quantity employed because the supply of labor decreases.
C) increases the quantity employed because the supply of labor increases.
D) decreases the quantity employed because the demand for labor increases.
E) does not change the quantity employed because people must have jobs in order to earn any income.
70) The incidence of an income tax on labor income is generally that the tax is
A) paid by only workers.
B) paid by only employers.
C) shared equally between workers and employers.
D) shared but not necessarily equally between workers and employers.
E) funded by the deadweight loss.
71) 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.
A) 45; 50
B) 95; 0
C) 0; 95
D) 50; 45
E) 42.5; 42.5
72) When governments tax capital income, the equilibrium quantity of capital
A) increases because of the international mobility of capital.
B) does not change because the supply of capital is perfectly elastic.
C) decreases.
D) does not change because the supply of capital is perfectly inelastic.
E) might increase or decrease depending on whether the demand for capital is inelastic or elastic.
73) If the supply of capital is perfectly elastic, the incidence of a tax on capital income is
A) paid entirely by the suppliers of capital.
B) paid entirely by firms that demand capital.
C) shared equally between firms that demand capital and the suppliers of capital.
D) shared but not equally between firms that demand capital and the suppliers of capital.
E) unknown.
74) A tax on income from land in Montana is borne entirely by landowners because the
A) demand for land is perfectly inelastic.
B) supply of land is perfectly inelastic.
C) supply of land is perfectly elastic.
D) demand for land is perfectly elastic.
E) deadweight loss from the tax would otherwise be infinite.
75) When a Social Security tax is imposed on workers, employment ________ and when a Social Security tax is imposed on employers, employment ________.
A) increases; increases
B) increases; decreases
C) decreases; increases
D) decreases; decreases
E) decreases; does not change
