Consider the market for unskilled labor in Iowa. Suppose the state government votes to impose a $3.00 tax on each worker'shourly wages. The labor supply curve will shift up by $3.00. Use the points to trace out the tax revenue the government willgain from this tax and answer the questions.Hourly wage ($)201918171615141332HD9 8 7 6 54321121110Supply + taxSupplyDemand00 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95100Workers (in thousands)Tax Revenue Calculate the tax revenue generated per hour by the tax.tax revenue: $ 135000Determine the portion of the tax borne by the workers.tax borne by the workers: $ 45000Calculate the excess burden, also called deadweight loss, created by the tax.excess burden: $ 7500O

Market equilibrium occurs when the quantity demanded of a product or service by consumers is equal…

Consider the market for unskilled labor in Iowa. Suppose the state government votes to impose a $3.00 tax on each worker's ourly wages. The labor supply curve will shift up by $3.00. Use the points to trace out the tax revenue the government will ain from this tax and answer the questions. Hourly wage ($) 20 19 18 17 16 15 14 13 12 11 10 87654 Supply + tax Supply Demand Tax Revenue

Consider the market for unskilled labor in Iowa. Suppose the state government votes to impose a $3.00 tax on each worker's ourly wages. The labor supply curve will shift up by $3.00. Use the points to trace out the tax revenue the government will ain from this tax and answer the questions. Hourly wage ($) 20 19 18 17 16 15 14 13 12 11 10 87654 Supply + tax Supply Demand Tax Revenue

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose that government levies a payroll tax on employers and employees to finance employment insurance a. Using a clear, well- labeled supply- demand diagram, show how payroll tax affects labor market outcome, e.g. employment and market wage rates. b. On the graph, show the workers and firms surplus before and after the tax and deadweight loss created by the tax. c. Assume that the elasticity of labor supply and demand are 0.2 and -0.6, respectively. с. According to the law the payroll tax is split between employees and employers so that firms pay 58 percent of the tax, and employees pay 42 percent. Do you think parliament can mandate this division of the tax burden?
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Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
WAGE(Dollars per hour) 20 18 16 14 12 10 8 6 4 2 0 0 40 80 120 160 200 240 280 320 380 400 LABOR (Number of workers) Levied on Employers (Dollars per hour) 4 Supply Tax Proposal 0 2 berand I I Levied on Workers Graph Input Tool Market for Laboratory Aides Wage (Dollars per hour) (Dollars per hour) 0 4 2 Labor Demanded (Number of workers) Demand Shifter Tax Levied on Employers (Dollars per hour) For each of the proposals, use the previous graph to determine the new number of laboratory aides hired. Then compute the after-tax amount paid by employers (that is, the wage paid to workers plus any taxes collected from the employers) and the after-tax amount earned by laboratory aides (that is, the wage received by workers minus any taxes collected from the workers). Quantity Hired (Number of workers) 4 248 0 Labor Supplied (Number of workers) Supply Shifter Tax Levied on Workers (Dollars per hour) After-Tax Wage Paid by Employers (Dollars per hour) 152 After-Tax Wage Received by Workers…
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