After you have studied Reading Between the Lines on pp. 144–145 answer the following questions.

a. In what ways do employers break laws in the underground labor market described in the news article?

b. How does a tax on labor change the equilibrium level of employment and the wage rate paid by employers?

c. How does a minimum wage law make tax evasion more likely to occur?

d. How can the minimum wage law and tax law be enforced more effectively?

e. Use the analysis of a market for an illegal good (on pp. 142–143) to explain how stiffer penalties would change the quantity of labor traded and change the wage rate in the underground economy.