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6. who should pawI the tax? The following glaph shows the labor market for research assistants in the ctional countriiur of Collegia. The equilibrium wage

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6. who should pawI the tax? The following glaph shows the labor market for research assistants in the ctional countriiur of Collegia. The equilibrium wage is $10 per hour, and the equilibrium number of research assistants is 250. Suppose the government has decided to institute a $4perhour 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 1e tax is collected from each side). Use the graph input too! to evaluate these three pmposais, Entering a number into the Tax Levied on Empioyers 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 eld (initiaiiy set at zero dollar: per hour} shii'h the suppiy curve up by the amount you enter. To determine the beforetax wage for each tax proposal, adjust the amount in the Wage eld untii the quantity of labor supplied equals the quantity of labor demanded. You will! not he graded on any changes you make to this graph. Note: Once 1,rou enter a value in a white eld, the glaph and any.r corresponding amounts in each grey:r eld will change accordingly. Graph Input Tool Market for Research Assistants 2D 13 16 I E: Er5 per hour} E 1': Labor Demanded 525 Labor Sup lied u a 1-1- (Numher of workers) (Number o workers} E- 12 g 1n Demand Shifter Supply Shifter a D _ _ g a Ems: m E was.\" m =( - {Doars per hour} (Dollars per hour} 3 4 2 I} D 5D 10D 15D 20D 25B 300 35B 100 45D EDD LABOR {Nun'ber ofworkers) For each of the proposais, use the previous graph to determine the new number ofresearch assistants hired. Then compute the aftertax amount paid by employers (that is, the Wage paid to workers plus any taxes ooiiected' from the employers} and the a'eretax amount earned by research assistants (that is, the Wage received by workers minus any taxes coiiecteti from the workers}. After-Tax Wage Paid by AfterTax Wage Received by Tax Proposal Quantity Hired Employers Workers Levied on Leviell on ( Number of (Dollars per hour} {Dollars per hour} Employers Workers workers) (Doil'ars per hour) (Dol'l'ars per hour) 4 D E E E '1 4 E E E 2 2 E E E Suppose the government is concerned that research assistants already make too little money and, therefore, wants to minimize the share ofthe tax paid by employees. Ofthe three tax proposals, which is best for accomplishing this goal? 0 The proposal in which the entire tax is oollected from workers 0 The proposal in which the lax is collected from each side evenly O The proposal in which the lax is collected from employers 0 None of the proposals is better than the others Continue without saving

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