Suppose that the supply curve of workers is given by w = 14 + 6Es, while the demand curve is given by w = 55-3Ep. Suppose now a tax of $5 is added into this labor market. a.) How much do workers receive as wage after the payroll tax? Round to two decimal places. b.) How much do firms have to pay workers after this payroll tax? Round to two decimal places. c.) What is the government tax revenue as a result of the payroll tax? Round to two decimal places. d.) What is the amount of deadweight loss? Round to two decimal places.
Suppose that the supply curve of workers is given by w = 14 + 6Es, while the demand curve is given by w = 55-3Ep. Suppose now a tax of $5 is added into this labor market. a.) How much do workers receive as wage after the payroll tax? Round to two decimal places. b.) How much do firms have to pay workers after this payroll tax? Round to two decimal places. c.) What is the government tax revenue as a result of the payroll tax? Round to two decimal places. d.) What is the amount of deadweight loss? Round to two decimal places.
Chapter16: Labor Markets
Section: Chapter Questions
Problem 16.4P
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