3. The demand curve for gardeners is Gd = 20 – W, where, G = the number of gardeners, and W= the hourly wage. The supply curve is Gs = 4W. a) Graph the demand and supply curves. What is the equilibrium wage and equilibrium number of gardeners hired? b) Suppose the town government imposes a $2 per hour tax on all gardeners. What is the effect on the equilibrium wage and the equilibrium number of gardeners hired? Graph the impact of this tax on the market c) How much is the tax burden on gardeners? d) How much is the tax burden on consumers? e) How much does the government receive as tax revenue? f) Calculate the elasticity of employment in Gd and Gs at the equilibrium wage calculated in (a). Do they have the same elasticity values for every point across the curve? Explain.

ECON MICRO
5th Edition
ISBN:9781337000536
Author:William A. McEachern
Publisher:William A. McEachern
Chapter12: Labor Markets And Labor Unions
Section: Chapter Questions
Problem 1.1P
icon
Related questions
Question

Solve d, e, and f please.

Thank you

3. The demand curve for gardeners is Gd = 20 – W, where, G = the number of gardeners, and W=
the hourly wage. The supply curve is Gs = 4W.
a) Graph the demand and supply curves. What is the equilibrium wage and equilibrium number of
gardeners hired?
b) Suppose the town government imposes a $2 per hour tax on all gardeners. What is the effect on
the equilibrium wage and the equilibrium number of gardeners hired? Graph the impact of this
tax on the market
c) How much is the tax burden on gardeners?
d) How much is the tax burden on consumers?
e) How much does the government receive as tax revenue?
f) Calculate the elasticity of employment in Gd and Gs at the equilibrium wage calculated in (a).
Do they have the same elasticity values for every point across the curve? Explain.
Transcribed Image Text:3. The demand curve for gardeners is Gd = 20 – W, where, G = the number of gardeners, and W= the hourly wage. The supply curve is Gs = 4W. a) Graph the demand and supply curves. What is the equilibrium wage and equilibrium number of gardeners hired? b) Suppose the town government imposes a $2 per hour tax on all gardeners. What is the effect on the equilibrium wage and the equilibrium number of gardeners hired? Graph the impact of this tax on the market c) How much is the tax burden on gardeners? d) How much is the tax burden on consumers? e) How much does the government receive as tax revenue? f) Calculate the elasticity of employment in Gd and Gs at the equilibrium wage calculated in (a). Do they have the same elasticity values for every point across the curve? Explain.
Expert Solution
steps

Step by step

Solved in 2 steps with 2 images

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
ECON MICRO
ECON MICRO
Economics
ISBN:
9781337000536
Author:
William A. McEachern
Publisher:
Cengage Learning
Principles of Economics 2e
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax