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2. Suppose the Canadian government levies a tax of $t on every hour worked. Firms are required to pay this tax, and the government spends
2. Suppose the Canadian government levies a tax of $t on every hour worked. Firms are required to pay this tax, and the government spends the money on pensions for workers. Workers value these pensions by more than their cost (i.e., the tax is less than the value of the pension to workers). How does this tax and expenditure program affect: employment wages total costs to employers total value of compensation to workers? Explain and illustrate with reference to a carefully labeled diagram
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