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The figure below shows the weekly market for labor in the absence of taxes. Suppose the government imposes a weekly payroll tax of $30 per
The figure below shows the weekly market for labor in the absence of taxes. Suppose the government imposes a weekly payroll tax of $30 per worker---that is, employers have to pay $30 for each worker they hire in the week. wage ($/worker) 140 Labor Supply 120 Labor Demand 100 80 60 40 20 0 0 10 20 30 40 50 60 70 80 Labor (thousands of workers/week) Refer to the graph above to answer the following 6 questions: (a) How many people worked in equilibrium before the introduction of the payroll tax? (b) How many people work in the equilibrium after the introduction of the payroll tax?(c) In the equilibrium with the tax, what is the employer's tax-inclusive cost of labor per worker (i.e., the total labor cost)? (d) What is the wage received by workers in the equilibrium with the tax? (e) What is the tax revenue the government collects from the $30-per-worker payroll tax? (f) What is the deadweight loss from the tax? (g) Why does this deadweight loss arise
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