The graph illustrates the labor market in a country that does not tax labor income. Suppose that the government introduces a Social Security tax of $2 an hour. Wage rate (dollars per hour) 14.00 If the govemment splits the Social Security tax equally between workers and employers, how many workers are employed? 13.00- LS What is the wage rate paid by employers and what is the workers' after-tax wage rate? 12.00 11.00 10.00 10.00 he number of workers employed is (800 9.00- ne wage rate paid by employers including the tax is $2. and the worker's after-tax wage te is $2. 8.00- 900 LD 7.00- 600 700 800 900 1000 1100 120 Quantity (workers)

The graph illustrates the labor market in a country that does not tax labor income. Suppose that the government introduces a Social Security tax of $2 an hour. Wage rate (dollars per hour) 14.00 If the govemment splits the Social Security tax equally between workers and employers, how many workers are employed? 13.00- LS What is the wage rate paid by employers and what is the workers' after-tax wage rate? 12.00 11.00 10.00 10.00 he number of workers employed is (800 9.00- ne wage rate paid by employers including the tax is $2. and the worker's after-tax wage te is $2. 8.00- 900 LD 7.00- 600 700 800 900 1000 1100 120 Quantity (workers)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The graph illustrates the labor market in a country that does not tax labor income. Suppose the government introduces a Social Security tax of $2 an hour and it is split equally between workers and employers. The number of workers employed is. 14.00- 13.00- 12.00- 11.00- 10.00- 9.00- 8.00- Wage rate (dollars per hour) 10.00 7.00+ 600 700 $900 800 900 Quantity (workers) LS LD 1000 1100 1200 Q Q G
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