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B1. Some economists argue that taxing capital has the benefit of increasing employment and wages because such taxes increase the demand for labor. Use an

B1. Some economists argue that taxing capital has the benefit of increasing employment and wages because such taxes increase the demand for labor. Use an isoquant/isocost diagram to illustrate that the validity of this claim requires that the substitution effect be larger than the scale effect brought about by the tax on capital.

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