Consider the labor market. Suppose that the supply of labor is = 2 + / 2 and the demand for labor is = 52 2. Where is wage and is hours worked.

A. Determine the equilibrium wage and hours worked. Now suppose that the government levies a $5 per hour payroll tax on buyers of labor (firms).

B. Determine the gross wage, after tax wage and total hours worked under this tax.

C. Determine the worker (supplier) and firm (buyer) tax burdens.

D. Determine the deadweight loss associated with this payroll tax