The figure below depicts the supply (S) and demand (D) for labor in a perfectly competition market, along with the after-tax supply (S'), showing the pre-tax wage workers would need to be paid in order to for their after-tax income to satisfy their true labor supply curve. Recall that workers supply labor and employers demand labor. Wager rate per hour 12 10 7 5 a. $10; $10 500 650 700 800 Ob. $9; $9 O c. $12; $7 O d. $10; $5 S' (as a function of what firms pay) S (as a function of what workers take home) Based on the figure above, at the new equilibrium after the payroll tax is imposed, the firms' cost per unit of labor is and the workers' take home pay is per hour. Units of labor per hour
The figure below depicts the supply (S) and demand (D) for labor in a perfectly competition market, along with the after-tax supply (S'), showing the pre-tax wage workers would need to be paid in order to for their after-tax income to satisfy their true labor supply curve. Recall that workers supply labor and employers demand labor. Wager rate per hour 12 10 7 5 a. $10; $10 500 650 700 800 Ob. $9; $9 O c. $12; $7 O d. $10; $5 S' (as a function of what firms pay) S (as a function of what workers take home) Based on the figure above, at the new equilibrium after the payroll tax is imposed, the firms' cost per unit of labor is and the workers' take home pay is per hour. Units of labor per hour
Chapter10: Labor Markets And Income Distribution
Section: Chapter Questions
Problem 6SQP
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Transcribed Image Text:The figure below depicts the supply (S) and demand (D) for labor in a perfectly competition market, along with the after-tax supply
(S'), showing the pre-tax wage workers would need to be paid in order to for their after-tax income to satisfy their true labor supply
curve. Recall that workers supply labor and employers demand labor.
Wager rate
per hour
12
2075
10
a. $10; $10
b.
$9; $9
500 650 700 800
c. $12; $7
d. $10; $5
S' (as a function of
what firms pay)
S (as a function of
what workers take
home)
Based on the figure above, at the new equilibrium after the payroll tax is imposed, the firms' cost per unit of labor is
and the workers' take home pay is
per hour.
Units of labor
per hour
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