(a) On the graph shown below, draw the supply and demand for labor represented by the following data:

Wage 12 11 10 9 8 7 6 5 4 3 2 $1 Quantity of labor Supplied 20 17 14 12 10 8 6 5 4 3 2 1 Demanded 2 3 4 5 6 8 10 12 14 16 18 20

(b) How many workers are employed in equilibrium?

(c) What wage are they paid?

(d) Now suppose a payroll tax of $2 per worker is imposed on the employer. Draw the “supply

+ tax” graph that results.

(e) How many workers are now employed?

(f) Now how much is the employer paying for each worker?

(g) Now how much is each worker receiving?

For the incidence of this tax, compared to the initial equilibrium:

(h) What is the increase in the wage paid by the employer?

(i) What is the reduction in the wage received by the workers?