The following graph gives the labor market for laboratory aides in the imaginary country of Paideia. The equilibrium hourly wage is $$10,$ and theGraph Input Tool

Market for Laboratory Aides

Wage

$($Dollars per hour$)$

Labor Demanded

$($Number of workers$)$

$186$

Labor Supplied

$($Number of workers$)$

Demand Shifter

Supply Shifter

Tax Levied on

Tax Levied on

Employers

Workers

$($Dollars per hour$)$

$($Dollars per hour$)$

For each of the proposals, use the previous graph to determine the new number of laboratory aides hired. Then compute the after$-$tax amount paid

by employers $($that is$,$ the wage paid to workers plus any taxes collected from the employers$)$ and the after$-$tax amount earned by laboratory aides

$($that is$,$ the wage received by workers minus any taxes collected from the workers$).$

Tax Proposal

Levied on

Employers

$($Dollars per hour$)$

Levied on

Workers

$($Dollars per

hour$)$

After$-$Tax Wage Paid by

Employers

$($Dollars per hour$)$

After$-$Tax Wage Received by

Workers

$($Dollars per hour$)$

Quantity Hired

$($Number of

workers$)$

$0$

$4$

$2$

equilibrium number of laboratory aides is $150.$

Suppose the federal government of Paideia has decided to institute an hourly payroll tax of $$4$ on laboratory aides and wants to determine whet

tax should be levied on the workers, the employers, or both $($in such a way that half the tax is collected from each party$).$

Use the graph input tool to evaluate these three proposals. Entering a number into the Tax Levied on Employers field $($initially set at zero dollars

hour$)$ shifts the demand curve down by the amount you enter, and entering a number into the Tax Levied on Workers field $($initially set at zero

per hour$)$ shifts the supply curve up by the amount you enter. To determine the before$-$tax wage for each tax proposal, adjust the amount in the

Wage field until the quantity of labor supplied equals the quantity of labor demanded. You will not be graded on any changes you make to this $g$

Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.

Graph Input Tool

Market for Laboratory Aides

Wage

$($Dollars per hour$)$

Labor Demanded

$($Number of workers$)$

Demand Shifter