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

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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)?

business economics

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Answer 1

Answer #1

Ans) the new level of employment = 4,000

When $ 2,000 tax is imposed, buyers pay 7,000 and sellers receive $ 5,000 so the new level of employment = 4,000

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Answer 2

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