The demand curve for gardeners is G(D) = 19 – W, where G = the number of gardeners, and W = the hourly wage. The supply curve is G(S) = 4 + 2 W . a. Suppose the town government imposes a $2 per hour tax on all gardeners. Indicate the effect of the tax on the market for gardeners. What is the effect on the equilibrium wage and the equilibrium number of gardeners hired? How much does the gardener receive? How much does the customer pay? How much does the government receive as tax revenue?

The demand curve for gardeners is G(D) = 19 – W, where G = the number of gardeners, and W = the hourly wage. The supply curve is G(S) = 4 + 2 W . a. Suppose the town government imposes a $2 per hour tax on all gardeners. Indicate the effect of the tax on the market for gardeners. What is the effect on the equilibrium wage and the equilibrium number of gardeners hired? How much does the gardener receive? How much does the customer pay? How much does the government receive as tax revenue?

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter29: Resource Markets

Section: Chapter Questions

Problem 14E

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