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). Tax Proposal Levied on Employers (Dollars per hour) 2 Levied on Workers (Dollars per hour) 0 Quantity Hired (Number of workers) After-Tax Wage Paid by Employers (Dollars per hour) The proposal in which the entire tax is collected from workers The proposal in which the tax is collected from each side evenly The proposal in which the tax is collected from employers None of the proposals is better than the others After-Tax Wage Received by Workers (Dollars per hour) Suppose the government doesn't want to discourage employers from hiring laboratory aides and, therefore, wants to minimize the share of the tax paid by the employers. Of the three tax proposals, which is best for accomplishing this goal?

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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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).
Tax Proposal
Levied on
Employers
(Dollars per hour)
0
Levied on
Workers
(Dollars per
hour)
Quantity Hired
(Number of
workers)
000
After-Tax Wage Paid by
Employers
(Dollars per hour)
The proposal in which the entire tax is collected from workers
The proposal in which the tax is collected from each side evenly
The proposal in which the tax is collected from employers
None of the proposals is better than the others
000
After-Tax Wage Received by
Workers
(Dollars per hour)
000
Suppose the government doesn't want to discourage employers from hiring laboratory aides and, therefore, war to minimize the share of the tax
paid by the employers. Of the three tax proposals, which is best for accomplishing this goal?
Transcribed Image Text: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). Tax Proposal Levied on Employers (Dollars per hour) 0 Levied on Workers (Dollars per hour) Quantity Hired (Number of workers) 000 After-Tax Wage Paid by Employers (Dollars per hour) The proposal in which the entire tax is collected from workers The proposal in which the tax is collected from each side evenly The proposal in which the tax is collected from employers None of the proposals is better than the others 000 After-Tax Wage Received by Workers (Dollars per hour) 000 Suppose the government doesn't want to discourage employers from hiring laboratory aides and, therefore, war to minimize the share of the tax paid by the employers. Of the three tax proposals, which is best for accomplishing this goal?
6. Who should pay the tax?
The following graph gives the labor market for laboratory aides in the imaginary country of Sophos. The equilibrium hourly wage is $10, and the
equilibrium number of laboratory aides is 150.
Suppose the federal government of Sophos has decided to institute an hourly payroll tax of $4 on laboratory aides and wants to determine whether
the tax should be levied on the workers, the employers, or both (in such a way that half the tax is collected from each party).
Use the graph input tool to evaluate these three proposals. Entering a number into the Tax Levied on Employers field (initially set at zero dollars pe
hour) shifts the demand curve down by the amount you enter, and entering a number into the Tax Levied on Workers field (initially set at zero dolla
per hour) shifts the supply curve up by the amount you enter. To determine the before-tax wage for each tax proposal, adjust the amount in the
Wage field until the quantity of labor supplied equals the quantity of labor demanded. You will not be graded on any changes you make to this grap
Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.
WAGE (Dollars per hour)
10
10
0:
O
Supply
Demand)
30 60 90 120 150 100 210 240 270 300
LABOR (Number of workers)
Graph Input Tool
Market for Laboratory Aides
Wage
(Dollars per hour)
Labor Demanded
(Number of workers)
Dernand Shifter
Tax Levied on
Employers
(Dollars per hour)
4
375
0
Labor Supplied
(Number of workers)
Supply Shifter
Tax Levied on
Workers
(Dollars per hour)
0
Transcribed Image Text:6. Who should pay the tax? The following graph gives the labor market for laboratory aides in the imaginary country of Sophos. The equilibrium hourly wage is $10, and the equilibrium number of laboratory aides is 150. Suppose the federal government of Sophos has decided to institute an hourly payroll tax of $4 on laboratory aides and wants to determine whether the tax should be levied on the workers, the employers, or both (in such a way that half the tax is collected from each party). Use the graph input tool to evaluate these three proposals. Entering a number into the Tax Levied on Employers field (initially set at zero dollars pe hour) shifts the demand curve down by the amount you enter, and entering a number into the Tax Levied on Workers field (initially set at zero dolla per hour) shifts the supply curve up by the amount you enter. To determine the before-tax wage for each tax proposal, adjust the amount in the Wage field until the quantity of labor supplied equals the quantity of labor demanded. You will not be graded on any changes you make to this grap Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. WAGE (Dollars per hour) 10 10 0: O Supply Demand) 30 60 90 120 150 100 210 240 270 300 LABOR (Number of workers) Graph Input Tool Market for Laboratory Aides Wage (Dollars per hour) Labor Demanded (Number of workers) Dernand Shifter Tax Levied on Employers (Dollars per hour) 4 375 0 Labor Supplied (Number of workers) Supply Shifter Tax Levied on Workers (Dollars per hour) 0
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