se that the supply of labor is

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Consider the labor market. Suppose that the supply of labor is = 2 + H/2 and the demand for W=52−2H. Where W is wage and is hours worked.

Now suppose that the government levies a $5 per hour payroll tax on buyers of labor (firms).

  1. Determine the worker (supplier) and firm (buyer) tax burdens.

  2. Determine the deadweight loss associated with this payroll tax.

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