WAGE(Dollars per hour) 8 16 16 14 12 Supply Tax Proposal Levied on Employers (Dollars per hour) 2 Derand 040 80 120 160 200 240 280 320 380 400 LABOR (Number of workers) I i I Levied on Workers (Dollars per hour) 0 Graph Input Tool Market for Laboratory Aides Wage (Dollars per hour) 2 Labor Demanded (Number of workers) Demand Shifter Tax Levied on Employers (Dollars per hour) For each of the proposals, use the previous graph to determine the new number of laboratory aides 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 laboratory aides (that is, the wage received by workers minus any taxes collected from the workers). Quantity Hired (Number of workers) Un 248 0 000 Labor Supplied (Number of workers) Supply Shifter Tax Levied on Workers (Dollars per hour) After-Tax Wage Paid by Employers (Dollars per hour) 152 After-Tax Wage Received by Workers (Dollars 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 2075 10 500 650 700 800 a. $5 per unit b. $3 per unit c. $2 per unit d. $7 per unit S' (as a function of what firms pay) S (as a function of what workers take home) Units of labor Based on the figure above, the tax incidence paid by consumers is

6. Contrasting labor union laws in two states Consider two states that adopt different laws concerning labor unions. The following graph shows the labor market in a state in the North. Initially, the market-clearing wage there is $8.00 per hour. Suppose that the legislature in this northern state passes laws that make it easy for workers to join a union. Through collective bargaining, the union negotiates a wage of $10.00 per hour. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Graph Input Tool Market for Labor 16 14 Supply Wage 2.00 (Dollars per hour) 12 1,400 200 Labor Demanded (Thousands of workers) Labor Supplied (Thousands of workers) 10 Demand 200 400 600 800 1000 1200 1400 1600 LABOR (Thousands of workers) Enter $10.00 into the box labeled Wage on the previous graph. Hint: Be sure to pay attention to the units used on the graph. At the union wage, union workers will be employed. WAGE (Dollars per…

Table 16-2 Quantity of Labor Output of iPods per Week Marginal Product of Labor Product Price (dollars) Wage (dollars) 1 8 8 $300 $350 2 15 7 280 350 3 21 6 260 350 4 26 5 240 350 5 30 4 220 350 6 33 3 200 350 7 35 2 180 350 For the production data represented in this table, assume that labor is the only variable input. Refer to Table 16-2. The marginal profit from hiring the second unit of labor is Group of answer choices $4,200. $1,960. $1,450. $1,800.