Consider the market for labor, pictured above. Suppose the government imposes a tax of $2000 per...

Question

Question

Consider the market for labor, pictured above. Suppose the government imposes a tax of $2000 per...

Consider the market for labor, pictured above.

Suppose the government imposes a tax of $2000 per year on firms wishing to hire workers. What is the firms' surplus with the tax?

HINT: Remember, the firms are buying labor here - they are the CONSUMERS. Workers are SELLING their labor, they are the producers.

business economics

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

) locooo C 70001 AB = tax wedge = $2000 5000 4000 5000 - No of worken: # firms suples with the tax = Area of a triangle BCD

Add a comment

Answer 2

Similar Homework Help Questions

Consider the market for labor, pictured above. Suppose the government imposes a tax of $2000 per...

Consider the market for labor, pictured above. Suppose the government imposes a tax of $2000 per year on firms wishing to hire workers. What is government tax revenue?
Consider the market for labor, pictured above. Suppose the government imposes a tax of $2000 per...

Consider the market for labor, pictured above. Suppose the government imposes a tax of $2000 per year on firms wishing to hire workers. What is the new level of employment (i.e. number of workers in the new equilibrium)?
Labor supply = -300 + 30W and Labor Demand = 700-50W c) Suppose the government imposes...

Labor supply = -300 + 30W and Labor Demand = 700-50W c) Suppose the government imposes a wage floor of $15 in this market. Will be there be a surplus or shortage of workers, and of what magnitude (how many workers)? Surplus or shortage: Magnitude of surplus or shortage

The wage rate in a labor market is $20. At this wage, firms hire 300 million...

The wage rate in a labor market is $20. At this wage, firms hire 300 million hours of work and workers supply 300 million hours. The elasticity of labor demand is -0.2 and the elasticity of labor supply is 0.1. Then the government imposes a payroll tax of $1 per hour of work on firms. After the tax is imposed, [15 points] How much does it cost firms to hire an hour of labor, including cash wage plus tax?...
Suppose the government imposes a tax on labor income. Which of the following describe the effect...

Suppose the government imposes a tax on labor income. Which of the following describe the effect of the tax in the labor market? I f the demand for labor is more elastic than the supply, workers will bear more of the tax. Employment is not affected because workers need jobs. ill. The tax creates a deadweight loss. i only Ill and ili i only Oil and it i and ill only
1. Suppose market demand for oranges is given by QD = 500 - 10P where Qp...

1. Suppose market demand for oranges is given by QD = 500 - 10P where Qp is quantity demanded and P is the market price. Market supply is given by Qs = -100 + 10P where Qs is quantity supplied and P is the market price. (a) Find the equilibrium price and quantity in this market. (b) What is the consumer surplus and producer surplus? (C) Suppose that the government imposes a $10 tax on the good, to be included...

5. TAXES/SUBSIDIES, AND OTHER GOVERNMENT REGULATIONS 1. Consider the demand and supply for bubbly water in...

5. TAXES/SUBSIDIES, AND OTHER GOVERNMENT REGULATIONS 1. Consider the demand and supply for bubbly water in a market represented by the following equations: QD = 15 - 10P QS = 40P - 50 where Q is millions of bottles per year and P measures dollars per bottle. The equilibrium price of bubbly water is $1.30 per bottle and 2 million bottles are sold each year. (a) Calculate the price elasticity of demand and the price elasticity of supply at the...
HDTV Price $1 2000 a. Suppose the government imposes a $300 per unit tax. Find the...

HDTV Price $1 2000 a. Suppose the government imposes a $300 per unit tax. Find the tax wedge on the graph. What is the equilibrium quantity and price under this tax policy? 1800 1600 1400 1200 1000 800 600 b. What is CS, PS, and TS in this market under the $300 per unit tax? 400 2003 0 2 3 4 5 6 7 8 9 10 HDTV Quantity (in 1,000s) c. How much efficiency is loss as the result...
Suppose the government imposes a $20-per-bottle tax on suppliers.

Suppose the government imposes a $20-per-bottle tax on suppliers.At this tax amount, the equilibrium quantity of gin is _______ bottles, and the government collects $_______ in tax revenue.Now calculate the government's tax revenue if it sets a tax of 50, $20, $40, $50, $60, $80, or $100 per bottle. Hint: To find the equilibrium quantity after the tax, adjust the "Quantity" field until the Tax equals the value of the per-unit tax.) Using the data you generate, plot a Laffer...

Suppose the government imposes a $20-per-bottle tax on suppliers.

Government-imposed taxes cause reductions in the activity that is being taxed, which has important implications for revenue collections.To understand the effect of such a tax, consider the monthly market for vodka, which is shown on the following graph.Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph.Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey...

Consider the market for labor, pictured above. Suppose the government imposes a tax of $2000 per...

Homework Answers