Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Question
Chapter 8, Problem 8SPPA
To determine
To compute:
The number of workers employed if government divides the social security tax equally between workers and employers andthe wage rate paid before and after tax.
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Students have asked these similar questions
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
Price (dollars per pizza)
20
16
14
10
8
6
4
2
S+ tax on sellers
S
D
0 10 20 30 40 50 60 70 80 90 100
Quantity (thousands of pizzas)
The figure above shows the pizza market in the city of Pepperoniville. If the government imposes
the sales tax shown in the figure on sellers, then the price the buyer pays for pizza is $
and the price the seller receives for the pizza is $
Just enter value. Do not include the "$" sign.
The graph illustrates the labor market in a country that does not tax labour
income
Suppose that the government introduces a Social Security tax on workers of $2
an hour.
How many workers are employed?
What is the wage rate paid by employers and what is the workers' after-tax wage
rate?
How many workers are no longer employed?
The number of workers employed is
14.00
13.00
12.00-
11.00
10.00-
9.00-
8.00-
7.00
Wage rate (dollars per hour)
10.00
600
700
900
900 1000 1100
500
Quantity (workers)
LS
LD
1200
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Chapter 8 Solutions
Foundations of Economics (8th Edition)
Ch. 8 - Prob. 1SPPACh. 8 - Prob. 2SPPACh. 8 - Prob. 3SPPACh. 8 - Prob. 4SPPACh. 8 - Prob. 5SPPACh. 8 - Prob. 6SPPACh. 8 - Prob. 7SPPACh. 8 - Prob. 8SPPACh. 8 - Prob. 9SPPACh. 8 - Prob. 10SPPA
Ch. 8 - Prob. 1IAPACh. 8 - Prob. 2IAPACh. 8 - Prob. 3IAPACh. 8 - Prob. 4IAPACh. 8 - Prob. 5IAPACh. 8 - Prob. 6IAPACh. 8 - Prob. 7IAPACh. 8 - Prob. 8IAPACh. 8 - Prob. 9IAPACh. 8 - Prob. 10IAPACh. 8 - Prob. 1MCQCh. 8 - Prob. 2MCQCh. 8 - Prob. 3MCQCh. 8 - Prob. 4MCQCh. 8 - Prob. 5MCQCh. 8 - Prob. 6MCQCh. 8 - Prob. 7MCQCh. 8 - Prob. 8MCQ
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Similar questions
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- 5 4 3.5 3 2 Use the graph to answer the question that follows. Price ($) I I I 360 540 What is the value of the producer burden of the tax in this market? $90 $180 $360 $540 O $720 Quantity S Sarrow_forward6. Who should pay the tax? The following graph shows the labor market for research assistants in the fictional country of Collegia. The equilibrium wage is $10 per hour, and the equilibrium number of research assistants is 200. Suppose the government has decided to institute a $2-per-hour payroll tax on research assistants and is trying to determine whether the tax should be levied on the employer, the workers, or both (such that half the tax is collected from each side). Use the graph input tool to evaluate these three proposals. Entering a number into the Tax Levied on Employers field (initially set at zero dollars per hour) shifts the demand curve down by the amount you enter, and entering a number into the Tax Levied on Workers field (initially set at zero dollars per hour) shifts the supply curve up by the amount you enter. To determine the before-tax wage for each tax proposal, adjust the amount in the Wage field until the quantity of labor supplied equals the quantity of labor…arrow_forwardSuppose the market for cigarette is competitive. An economist estimates the price elasticity of demand and supply for cigarette are -0.6 and 0.8 respectively. a. Suppose the government imposes a per-unit tax on the cigarette sellers. Who, buyers or sellers, would share a heavier tax burden? Explain your answers without calculation. b. Suppose the government imposes a per-unit tax of $40 on the cigarette sellers. By how much would buyers and sellers of cigarettes share the tax burden respectively? Show your calculation. c. Suppose many small sellers, such as newsstands, complain the heavy tax burden borne by them. Would it be better to these small sellers if the government decides to impose a $20 per-unit tax on both the buyers and the sellers of cigarette? Explain.arrow_forward
- Price (dollars per pizzo) 20 18 16 14 12 10 8 aa 6 4 NA 2 S+ tax on sellers S 0 10 20 30 40 50 60 70 80 90 100 Quantity (thousands of pizzas) The figure above shows the pizza market in the city of Pepperoniville. If the government imposes the sales tax shown in the figure on sellers, then the tax revenue is $[value1]. Just enter value. Do not include the "$" sign.arrow_forwardThe govemment is considering imposing taxes onthe sellers of certain classes of products. The first tax they are considering is a tax on 2% milk. The second is a tax on all dairy products. The third is a tax on all food products. Which of these three taxes would you expect to have the largest impact on the sticker prices of the taxed products? Explain.arrow_forwardIf the market price before the tax is $10.05, the tax implemented is $5.9 on buyers, and the market price after the tax is 13.22, then the tax incidence on sellers is what?arrow_forward
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