For each of the proposals, use the previous graph to determine the new number of research assistants hired. Then compute the after-tax amount paid by employers (that is, the wage paid to workers plus...



6. Who should pay the tax?



The following graph shows the labor market for research assistants in the fictional country of Academia. The equilibrium wage is
$10 per hour, and the equilibrium number of research assistants is
250.

Suppose the government has decided to institute a
$4-per-hour payroll tax on research assistants
and is trying to determine whether the tax should be levied on the employer, the workers, or both (such that half the tax is collected from each side).



For each of the proposals, use the previous graph to determine the new number of research assistants hired. Then compute the after-tax amount<br>paid by employers (that is, the wage paid to workers plus any taxes collected from the employers) and the after-tax amount earned by research<br>assistants (that is, the wage received by workers minus any taxes collected from the workers).<br>After-Tax Wage Paid by<br>After-Tax Wage Received by<br>Таx Proposal<br>Quantity Hired<br>Employers<br>Workers<br>Levied on<br>Levied on<br>(Number of<br>(Dollars per hour)<br>(Dollars per hour)<br>Employers<br>Workers<br>workers)<br>(Dollars per hour)<br>(Dollars per<br>hour)<br>4<br>4<br>2<br>Suppose the government is concerned that research assistants already make too little money and, therefore, wants to minimize the share of the tax<br>paid by employees. Of the three tax proposals, which is best for accomplishing this goal?<br>The proposal in which the entire tax is collected from workers<br>The proposal in which the tax is collected from each side evenly<br>The proposal in which the tax is collected from employers<br>None of the proposals is better than the others<br>

Extracted text: For each of the proposals, use the previous graph to determine the new number of research assistants 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 research assistants (that is, the wage received by workers minus any taxes collected from the workers). After-Tax Wage Paid by After-Tax Wage Received by Таx Proposal Quantity Hired Employers Workers Levied on Levied on (Number of (Dollars per hour) (Dollars per hour) Employers Workers workers) (Dollars per hour) (Dollars per hour) 4 4 2 Suppose the government is concerned that research assistants already make too little money and, therefore, wants to minimize the share of the tax paid by employees. Of the three tax proposals, which is best for accomplishing this goal? The proposal in which the entire tax is collected from workers The proposal in which the tax is collected from each side evenly The proposal in which the tax is collected from employers None of the proposals is better than the others
Graph Input Tool<br>Market for Research Assistants<br>20<br>18<br>I Wage<br>(Dollars per hour)<br>4<br>16<br>Labor Supplied<br>(Number of workers)<br>Supply<br>Labor Demanded<br>625<br>14<br>(Number of workers)<br>12<br>Demand Shifter<br>Supply Shifter<br>10<br>8<br>Demand<br>Tax Levied on<br>Workers<br>(Dollars per hour)<br>Tax Levied on<br>Employers<br>(Dollars per hour)<br>4<br>2<br>50<br>100 150 200 250 300 350 400 450 500<br>LABOR (Number of workers)<br>For each of the proposals, use the previous graph to determine the new number of research assistants hired. Then compute the after-tax amount<br>paid by employers (that is, the wage paid to workers plus any taxes collected from the employers) and the after-tax amount earned by research<br>assistants (that is, the wage received by workers minus any taxes collected from the workers).<br>After-Tax Wage Paid by<br>After-Tax Wage Received by<br>Tax Proposal<br>Quantity Hired<br>Employers<br>Workers<br>Levied on<br>Levied on<br>(Number of<br>(Dollars per hour)<br>(Dollars per hour)<br>Employers<br>Workers<br>workers)<br>(Dollars per hour)<br>(Dollars per<br>WAGE (Dollars per hour)<br>

Extracted text: Graph Input Tool Market for Research Assistants 20 18 I Wage (Dollars per hour) 4 16 Labor Supplied (Number of workers) Supply Labor Demanded 625 14 (Number of workers) 12 Demand Shifter Supply Shifter 10 8 Demand Tax Levied on Workers (Dollars per hour) Tax Levied on Employers (Dollars per hour) 4 2 50 100 150 200 250 300 350 400 450 500 LABOR (Number of workers) For each of the proposals, use the previous graph to determine the new number of research assistants 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 research assistants (that is, the wage received by workers minus any taxes collected from the workers). After-Tax Wage Paid by After-Tax Wage Received by Tax Proposal Quantity Hired Employers Workers Levied on Levied on (Number of (Dollars per hour) (Dollars per hour) Employers Workers workers) (Dollars per hour) (Dollars per WAGE (Dollars per hour)
Jun 10, 2022
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