Question
I found this document so that I could work backwards to find the answer. However I cannot figure out how to calculate the employee or
I found this document so that I could work backwards to find the answer. However I cannot figure out how to calculate the employee or employer surplus. Can you explaining step by step how those were figured out? Is there a formula?
Suppose that the demand for workers is given by the equation
QD= 40 - W(1+t)
and the supply of workers is given by
QS= -10 + W(1+b).
What is the equilibrium W and W(1+b)? W(1+b) is the worker's full compensation, from their perspective, and that's what we need to focus on to see whether "employer-paid" benefits actually benefit workers after money wages (W) adjust to the change in worker supply and demand caused by the t and b scheme.We also need to see what happens to W - money wages - when the payment of worker benefits is forced onto firms.Do wages rise or fall when firms are taxed t percent on every $1 of wages and employees receive b percent in benefits on every $1 of wages?
Fill in the below table.
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Here is a link to the table.
https://drive.google.com/file/d/1Wd2OtqW8hWYslnOcMydk-VoZALSltWdO/view?usp=sharing
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