The demand curve for gardeners is G(D) = 19 – W, where G = the number of gardeners, and W = the hourly wage. The supply curve is G(S) = 4 + 2 W . a. Suppose the town government imposes a $2 per hour tax on all gardeners. Indicate the effect of the tax on the market for gardeners. What is the effect on the equilibrium wage and the equilibrium number of gardeners hired? How much does the gardener receive? How much does the customer pay? How much does the government receive as tax revenue?
The demand curve for gardeners is G(D) = 19 – W, where G = the number of gardeners, and W = the hourly wage. The supply curve is G(S) = 4 + 2 W . a. Suppose the town government imposes a $2 per hour tax on all gardeners. Indicate the effect of the tax on the market for gardeners. What is the effect on the equilibrium wage and the equilibrium number of gardeners hired? How much does the gardener receive? How much does the customer pay? How much does the government receive as tax revenue?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The demand curve for gardeners is G(D) = 19 – W, where G = the number
of gardeners, and W = the hourly wage. The supply curve is G(S) = 4 + 2 W .
a. Suppose the town government imposes a $2 per hour tax on all gardeners. Indicate the effect of the tax on the market for gardeners.
What is the effect on the equilibrium wage and the equilibrium number of gardeners hired? How much does the gardener receive? How
much does the customer pay? How much does the government receive
as tax revenue?
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