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You are an economic consultant to a city that just imposed a payroll tax of$2 per hour of work. This payroll tax is paid by
You are an economic consultant to a city that just imposed a payroll tax of$2 per hour of work.
This payroll tax is paid by workers through a payrolldeduction: For each hour ofwork, the employer deducts$2 and sends the money to the city government.
The initial wage(before thetax) is$10, and total employment is20,000 hours per day.
Use the line drawing tool to show the effect of the tax on the equilibrium wage and employment. Label this line.
Note: if you are not prompted for alabel, you have used the wrong drawing tool.
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