Who should pay the tax? The following graph gives the labor market for laboratory aides in the imaginary country of Paideia. The equilibrium hourly wage is $10 , and the equilibrium number of laboratory aides is 150 .            Suppose the federal government of Paideia has decided to institute an hourly payroll tax of $4 on laboratory aides and wants to determine whether the tax should be levied on the workers, the employers, or both (in such a way that hay the tax is collected from each party).         Use the graph input tool to evaluate these thret proposal5; Entering a number into the Tax Levied on Employers feld (inibialy set at adro dallars per hour) shilts the demand curve down by the amount you enter, and entering a number into the Tax Leviod on workers fieid (initially set at acro dollas per bour) shifts the supply curve up by the amount your enter. To determine the before-tax wage for each tar proposal, adjust

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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        Who should pay the tax? The following graph gives the labor market for laboratory aides in the imaginary country of Paideia. The equilibrium hourly wage is $10 , and the equilibrium number of laboratory aides is 150 .   

        Suppose the federal government of Paideia has decided to institute an hourly payroll tax of $4 on laboratory aides and wants to determine whether the tax should be levied on the workers, the employers, or both (in such a way that hay the tax is collected from each party).

        Use the graph input tool to evaluate these thret proposal5; Entering a number into the Tax Levied on Employers feld (inibialy set at adro dallars per hour) shilts the demand curve down by the amount you enter, and entering a number into the Tax Leviod on workers fieid (initially set at acro dollas per bour) shifts the supply curve up by the amount your enter. To determine the before-tax wage for each tar proposal, adjust the amcunt in the wage field unbil the quantity of labor supplied equals the quantity or labor demanded. You wil not be graded on any changes you make to this gragh

  Note: Once you enter a volue in a white field, the graph and any corresponding amounts in each grey field will change accordingly.

WAGE (Dollars per hour)
18
10
14
12
10
8
8
4
NO
Supply
Demand
0 30 60 90 120 150 180 210 240 270 300
LABOR (Number of workers)
Graph Input Tool
Market for Laboratory Aides
Wage
(Dollars per hour)
Labor Demanded
(Number of workers)
Demand Shifter
Tax Levied on
Employers
(Dollars per hour)
4
375
0
Labor Supplied
(Number of workers)
Supply Shifter
Tax Levied on
Workers
(Dollars per hour)
0
Transcribed Image Text:WAGE (Dollars per hour) 18 10 14 12 10 8 8 4 NO Supply Demand 0 30 60 90 120 150 180 210 240 270 300 LABOR (Number of workers) Graph Input Tool Market for Laboratory Aides Wage (Dollars per hour) Labor Demanded (Number of workers) Demand Shifter Tax Levied on Employers (Dollars per hour) 4 375 0 Labor Supplied (Number of workers) Supply Shifter Tax Levied on Workers (Dollars per hour) 0
For each of the proposals, use the previous graph to determine the new number of laboratory aides 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 laboratory aides
(that is, the wage received by workers minus any taxes collected from the workers).
Tax Proposal
Levied on
Employers
(Dollars per hour)
0
Levied on
Workers
(Dollars per
hour)
0
4
Quantity Hired
(Number of
workers)
After-Tax Wage Paid by
Employers
(Dollars per hour)
After-Tax Wage Received by
Workers
(Dollars per hour)
Transcribed Image Text:For each of the proposals, use the previous graph to determine the new number of laboratory aides 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 laboratory aides (that is, the wage received by workers minus any taxes collected from the workers). Tax Proposal Levied on Employers (Dollars per hour) 0 Levied on Workers (Dollars per hour) 0 4 Quantity Hired (Number of workers) After-Tax Wage Paid by Employers (Dollars per hour) After-Tax Wage Received by Workers (Dollars per hour)
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