OilPatch is a mineral rich economy in which the government gets most of its tax revenue from oil royalties. But OilPatch has an income tax. The tables below describe the labor market in OilPatch and the economy's production function. The government introduces an income tax of $2 per hour worked. Use the tables below, determine the after-tax real wage received by workers Labor market Real wage rate (dollars per hour) 10 11 12 13 14 15 $13/hour O $11 hour $10/hour $12/hour Quantity of labor demanded (thousands of hours) 4 2 Quantity of labor supplied (thousands of hours) 3 4 6 Production function Employment (thousands of hours) 2 3 6 7 Real GDP (millions of dollars) 11 15 18 20 21

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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OilPatch is a mineral rich economy in which the government gets most of its tax revenue from oil royalties. But OilPatch has an income
tax. The tables below describe the labor market in OilPatch and the economy's production function. The government introduces an
income tax of $2 per hour worked. Use the tables
below, determine the after-tax real wage received by workers
Labor market
Real wage rate
(dollars
per hour)
10
11
12
13
14
15
$13/hour
O $11 hour
$10/hour
$12/hour
Quantity of labor
demanded
(thousands of hours)
5
4
2
Quantity of labor
supplied
(thousands of hours)
3
6
7
Production function
Employment
(thousands
of hours)
2
3
6
7
Real GDP
(millions of
dollars)
6
11
15
18
20
21
Transcribed Image Text:OilPatch is a mineral rich economy in which the government gets most of its tax revenue from oil royalties. But OilPatch has an income tax. The tables below describe the labor market in OilPatch and the economy's production function. The government introduces an income tax of $2 per hour worked. Use the tables below, determine the after-tax real wage received by workers Labor market Real wage rate (dollars per hour) 10 11 12 13 14 15 $13/hour O $11 hour $10/hour $12/hour Quantity of labor demanded (thousands of hours) 5 4 2 Quantity of labor supplied (thousands of hours) 3 6 7 Production function Employment (thousands of hours) 2 3 6 7 Real GDP (millions of dollars) 6 11 15 18 20 21
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