The following graph gives the labor market for laboratory aides in the imaginary country of Sophos. The equilibrium hourly wage is $10, and theequilibrium number of laboratory aides is 250.Suppose the federal government of Sophos has decided to institute an hourly payroll tax of $4 on laboratory aides and wants to determine whetherthe tax should be levied on the workers, the employers, or both (in such a way that half the tax is collected from each party).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 perhour) 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 dollarsper 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 theWage field until the quantity of labor supplied equals the quantity of labor demanded. You will not be graded on any changes you make to this graph.Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.WAGE (Dollars per hour)20180 50 100 150 200 250 300 350 400 450 500LABOR (Number of workers)Levied onEmployers(Dollars per hour)40Tax Proposal2Levied onWorkersSupply(Dollars perhour)0Demand42D-TaxGraph Input ToolMarket for Laboratory AidesWage(Dollars per hour)For each of the proposals, use the previous graph to determine the new number of laboratory aides hired. Then compute the after-tax amount paidby 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).Labor Demanded(Number of workers)Quantity Hired(Number ofworkers)Demand ShifterTax Levied onEmployers(Dollars per hour)100The proposal in which the entire tax is collected from workersO The proposal in which the tax is collected from each side evenlyO The proposal in which the tax is collected from employersO None of the proposals is better than the othersLabor Supplied(Number of workers)After-Tax Wage Paid byEmployers(Dollars per hour)Supply ShifterTax Levied onWorkers(Dollars per hour)250After-Tax Wage Received byWorkers(Dollars per hour)Suppose the government doesn't want to discourage employers from hiring laboratory aides and, therefore, wants to minimize the share of the taxpaid by the employers. Of the three tax proposals, which is best for accomplishing this goal?

The demand function reflects an individual’s willingness to pay for each unit of the quantity he or…

The following graph gives the labor market for laboratory aides in the imaginary country of Sophos. The equilibrium hourly wage is $10, and the equilibrium number of laboratory aides is 250. Suppose the federal government of Sophos 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 half the tax is collected from each party). 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 demanded. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. WAGE (Dollars per hour) 102828 ** ONA Tax Proposal 0 50 100 150 200 250 300 350 400 450 500 LABOR (Number of workers) Levied on Employers (Dollars per hour) Levied on Workers Supply (Dollars per hour) 0 Demand 4 2 D-Tax 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) 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). Quantity Hired (Number of workers) 10 0 O The proposal in which the entire tax is collected from workers O The proposal in which the tax is collected from each side evenly O The proposal in which the tax is collected from employers O None of the proposals is better than the others Labor Supplied (Number of workers) Supply Shifter Tax Levied on Workers (Dollars per hour) After-Tax Wage Paid by Employers (Dollars per hour) 250 After-Tax Wage Received by Workers (Dollars per hour) Suppose the government doesn't want to discourage employers from hiring laboratory aides and, therefore, wants to minimize the share of the tax paid by the employers. Of the three tax proposals, which is best for accomplishing this goal?

The following graph gives the labor market for laboratory aides in the imaginary country of Sophos. The equilibrium hourly wage is $10, and the equilibrium number of laboratory aides is 250. Suppose the federal government of Sophos 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 half the tax is collected from each party). 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 demanded. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. WAGE (Dollars per hour) 102828 ** ONA Tax Proposal 0 50 100 150 200 250 300 350 400 450 500 LABOR (Number of workers) Levied on Employers (Dollars per hour) Levied on Workers Supply (Dollars per hour) 0 Demand 4 2 D-Tax 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) 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). Quantity Hired (Number of workers) 10 0 O The proposal in which the entire tax is collected from workers O The proposal in which the tax is collected from each side evenly O The proposal in which the tax is collected from employers O None of the proposals is better than the others Labor Supplied (Number of workers) Supply Shifter Tax Levied on Workers (Dollars per hour) After-Tax Wage Paid by Employers (Dollars per hour) 250 After-Tax Wage Received by Workers (Dollars per hour) Suppose the government doesn't want to discourage employers from hiring laboratory aides and, therefore, wants to minimize the share of the tax paid by the employers. Of the three tax proposals, which is best for accomplishing this goal?

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter29: Resource Markets

Section: Chapter Questions

Problem 15E

See similar textbooks