Scenario 5.1 The Demand for Noodles Is Given by the Following Equation

Multiple Choice

Scenario 5.1
The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x. Assume that P = $8, I = 200, and P_x = $10.
-The social security tax, like any other tax, is shared by employers and employees based on the elasticities of demand and supply. If the wage elasticity of demand for labor is zero and the wage elasticity of supply for labor is positive:

A) most of the tax will be paid by the employer.
B) most of the tax will be paid by the employee.
C) all of the tax will be paid by the employer.
D) all of the tax will be paid by the employee.
E) the tax is split evenly between the employer and employee.