The graph shows the demand for labor curve and supply of labor curve for an economy. Draw a point at the equilibrium real wage rate and equilibrium quantity of labor. Label it 1. Now the government imposes a tax on labor income. Draw a curve that shows the effect of this tax. Label it. Draw points at the new equilibrium quantity of labor to show: 1) the before-tax wage rate. Label it 2. 2) the after-tax wage rate. Label it 3. When the government imposes a tax on labor income, function occurs and potential GDP O A. a downward shift of; decreases B. a rightward movement along; increases C. a leftward movement along; decreases OD. an upward shift of; increases the production 50- 40- 30- 20- 10- 0- Real wage rate (2009 dollars per hour) 50 150 250 LS 350 LD 450
The graph shows the demand for labor curve and supply of labor curve for an economy. Draw a point at the equilibrium real wage rate and equilibrium quantity of labor. Label it 1. Now the government imposes a tax on labor income. Draw a curve that shows the effect of this tax. Label it. Draw points at the new equilibrium quantity of labor to show: 1) the before-tax wage rate. Label it 2. 2) the after-tax wage rate. Label it 3. When the government imposes a tax on labor income, function occurs and potential GDP O A. a downward shift of; decreases B. a rightward movement along; increases C. a leftward movement along; decreases OD. an upward shift of; increases the production 50- 40- 30- 20- 10- 0- Real wage rate (2009 dollars per hour) 50 150 250 LS 350 LD 450
Microeconomics: Principles & Policy
14th Edition
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:William J. Baumol, Alan S. Blinder, John L. Solow
Chapter6: Demand And Elasticity
Section: Chapter Questions
Problem 3TY
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G, 1
Economics
Transcribed Image Text:The graph shows the demand for labor curve and supply of labor curve for an
economy.
Draw a point at the equilibrium real wage rate and equilibrium quantity of labor.
Label it 1.
Now the government imposes a tax on labor income.
Draw a curve that shows the effect of this tax. Label it.
Draw points at the new equilibrium quantity of labor to show:
1) the before-tax wage rate. Label it 2.
2) the after-tax wage rate. Label it 3.
When the government imposes a tax on labor income,
function occurs and potential GDP
O A. a downward shift of; decreases
B. a rightward movement along; increases
C. a leftward movement along; decreases
D. an upward shift of; increases
the production
50-
40-
30-
20-
10-
0-
Real wage rate (2009 dollars per hour)
50
150
250
LS
350
LD
450
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