1. Evaluate the following statement: The more inelastic the supply of labor, the more likely it is that incidence of employers' share of the payroll tax falls on workers.

2. Explain the following statement: When a person's wages increase, an income effect will mean that a person will likely work fewer hours. Show the income effect on a graph.

3. Explain the following statement: When a person's wages decrease, a substitution effect will induce a person to work fewer hours. Show the substitution effect on a graph.