Demand More Inelastic Than Supply $1,800 Wages $1,600 Supply $1,400 $1,200 Wage1 $1,000 $800 $600 $400 Demand $200 $0 0 250 500 750 1000 1250 1500 1750 2000 2250 E1 Number of Workers Model a $200 Tax that Firms are responsible for giving to government: 1. New Supply or Demand Curve ii. New Equilibrium Wage iii. New Equilibrium Employment Initial Wage Before Tax: $1,000 Initial Employment Before Tax: 1,250 workers New Wage After Tax: $_ New Employment After Tax: workers Worker Take Home After Tax: $ Worker Tax Incidence: $ Firm's Cost of Hiring After Tax: $_ Firm Tax Incidence: $