A tax elasticity of supply equal to zero indicates that a. employers will not hire any...

A tax elasticity of supply equal to zero indicates that

a. employers will not hire any workers if tax rates increase

b.Workers will not cut back on the number of hours worked if tax rates increase

c. employers will hire more if tax rates increase

d. workers will not work at all if tax rates increase.

Solutions

Expert Solution

A tax elasticity of supply equal to zero indicates that workers will not cut back on the number of hours worked if tax rates increase, which means the inelastic supply . Hence,option(B) is correct.

Rahul Sunny answered 1 year ago

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