Graph Input Tool Market for Research Assistants 20 18 I Wage (Dollars per hour) 4 16 Supply Labor Demanded (Number of workers) Labor Supplied (Number of workers) 500 14 12 Demand Shifter Supply Shifter 10 Demand Tax Levied on Employers (Dollars per hour) Tax Levied on Workers (Dollars per hour) 6 4 2 40 80 120 160 200 240 280 320 360 400 LABOR (Number of workers) For each of the proposals, use the previous graph to determine the new number of research assistants 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 research assistants (that is, the wage received by workers minus any taxes collected from the workers). After-Tax Wage Paid by After-Tax Wage Received by Tax Proposal Quantity Hired Employers Workers (Number of workers) Levied on Levied on (Dollars per hour) (Dollars per hour) Employers Workers (Dollars per hour) (Dollars per hour) 2 1 1 Suppose the government is concerned that research assistants already make too little money and, therefore, wants to minimize the share of the tax paid by employees. Of the three tax proposals, which is best for accomplishing this goal? O The proposal in which the entire tax is collected from workers The proposal in which the tax is collected from each side evenly O The proposal in which the tax is collected from employers O None of the proposals is better than the others WAGE (Dollars per hour)
Graph Input Tool Market for Research Assistants 20 18 I Wage (Dollars per hour) 4 16 Supply Labor Demanded (Number of workers) Labor Supplied (Number of workers) 500 14 12 Demand Shifter Supply Shifter 10 Demand Tax Levied on Employers (Dollars per hour) Tax Levied on Workers (Dollars per hour) 6 4 2 40 80 120 160 200 240 280 320 360 400 LABOR (Number of workers) For each of the proposals, use the previous graph to determine the new number of research assistants 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 research assistants (that is, the wage received by workers minus any taxes collected from the workers). After-Tax Wage Paid by After-Tax Wage Received by Tax Proposal Quantity Hired Employers Workers (Number of workers) Levied on Levied on (Dollars per hour) (Dollars per hour) Employers Workers (Dollars per hour) (Dollars per hour) 2 1 1 Suppose the government is concerned that research assistants already make too little money and, therefore, wants to minimize the share of the tax paid by employees. Of the three tax proposals, which is best for accomplishing this goal? O The proposal in which the entire tax is collected from workers The proposal in which the tax is collected from each side evenly O The proposal in which the tax is collected from employers O None of the proposals is better than the others WAGE (Dollars per hour)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Graph Input Tool
Market for Research Assistants
20
18
I Wage
(Dollars per hour)
4
16
Labor Supplied
(Number of workers)
Labor Demanded
Supply
500
14
(Number of workers)
12
Demand Shifter
Supply Shifter
10
8
Demand
Tax Levied on
Employers
(Dollars per hour)
Tax Levied on
Workers
(Dollars per hour)
4
2
40
80
120 160 200 240 280 320 360 400
LABOR (Number of workers)
For each of the proposals, use the previous graph to determine the new number of research assistants 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 research
assistants (that is, the wage received by workers minus any taxes collected from the workers).
After-Tax Wage Paid by
After-Tax Wage Received by
Tax Proposal
Quantity Hired
Employers
Workers
Levied on
Levied on
(Number of
(Dollars per hour)
(Dollars per hour)
Employers
Workers
workers)
(Dollars per hour)
(Dollars per
hour)
2
2
1
Suppose the government is concerned that research assistants already make too little money and, therefore, wants to minimize the share of the tax
paid by employees. Of the three tax proposals, which is best for accomplishing this goal?
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
WAGE (Dollars per hour)
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