Question
6. Who should pay the tax? The following graph gives the labor market for laboratory aides in the imaginary country of Episteme. The equilibrium
6. Who should pay the tax? The following graph gives the labor market for laboratory aides in the imaginary country of Episteme. The equilibrium hourly wage is $10, and the equilibrium number of laboratory aides is 200. Suppose the federal government of Episteme has decided to institute an hourly payroll tax of $2 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. Graph Input Tool A- bonge
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