Microeconomics (7th Edition)
7th Edition
ISBN: 9780134737508
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 17, Problem 17.6.6PA
To determine
Tax incidence.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The following graph gives the labor market for laboratory aides in the imaginary country of Episteme. The equilibrium hourly wage is $10, and the
equilibrium number of laboratory aides is 250.
Suppose the federal government of Episteme has decided to institute an hourly payroll tax of $4 on laboratory aides and wants to determine whether
the tax should be levied on the workers, the employers, or both (in such a way that half the tax is collected from each party).
Use the graph input tool to evaluate these three proposals. Entering a number into the Tax Levied on Employers field (initially set at zero dollars per
hour) shifts the demand curve down by the amount you enter, and entering a number into the Tax Levied on Workers field (initially set at zero dollars
per hour) shifts the supply curve up by the amount you enter. To determine the before-tax wage for each tax proposal, adjust the amount in the
Wage field until the quantity of labor supplied equals the quantity of labor demanded.…
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 $2-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).
Use the graph input tool to evaluate these three proposals. Entering a number into the Tax Levied on Employers field (initially set at zero dollars per
hour) shifts the demand curve down by the amount you enter, and entering a number into the Tax Levied on Workers field (initially set at zero dollars
per hour) shifts the supply curve up by the amount you enter. To determine the before-tax wage for each tax proposal, adjust the amount in the
Wage field until the quantity of labor supplied equals the quantity of labor demanded. You will not be…
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).
Use the graph input tool to evaluate these three proposals. Entering a number into the Tax Levied on Employers field (initially set at zero dollars per hour) shifts the demand curve down by the amount you enter, and entering a number into the Tax Levied on Workers field (initially set at zero dollars per hour) shifts the supply curve up by the amount you enter. To determine the before-tax wage for each tax proposal, adjust the amount in the Wage field until the quantity of labor supplied equals the quantity of labor demanded. You will not be…
Chapter 17 Solutions
Microeconomics (7th Edition)
Ch. 17 - Prob. 17.1.1RQCh. 17 - Prob. 17.1.2RQCh. 17 - Prob. 17.1.3RQCh. 17 - Prob. 17.1.4RQCh. 17 - Prob. 17.1.5PACh. 17 - Prob. 17.1.6PACh. 17 - Prob. 17.1.7PACh. 17 - Prob. 17.1.8PACh. 17 - Prob. 17.1.9PACh. 17 - Prob. 17.2.1RQ
Ch. 17 - Prob. 17.2.2RQCh. 17 - Prob. 17.2.3PACh. 17 - Prob. 17.2.4PACh. 17 - Prob. 17.2.5PACh. 17 - Prob. 17.2.6PACh. 17 - Prob. 17.2.7PACh. 17 - Prob. 17.2.8PACh. 17 - Prob. 17.3.1RQCh. 17 - Prob. 17.3.2RQCh. 17 - Prob. 17.3.3PACh. 17 - Prob. 17.3.4PACh. 17 - Prob. 17.3.5PACh. 17 - Prob. 17.3.6PACh. 17 - Prob. 17.3.7PACh. 17 - Prob. 17.3.8PACh. 17 - Prob. 17.4.1RQCh. 17 - Prob. 17.4.2RQCh. 17 - Prob. 17.4.3RQCh. 17 - Prob. 17.4.4PACh. 17 - Prob. 17.4.5PACh. 17 - Prob. 17.4.6PACh. 17 - Prob. 17.4.7PACh. 17 - Prob. 17.4.8PACh. 17 - Prob. 17.4.9PACh. 17 - Prob. 17.4.10PACh. 17 - Prob. 17.4.11PACh. 17 - Prob. 17.4.12PACh. 17 - Prob. 17.4.13PACh. 17 - Prob. 17.4.14PACh. 17 - Prob. 17.4.15PACh. 17 - Prob. 17.4.16PACh. 17 - Prob. 17.4.17PACh. 17 - Prob. 17.4.18PACh. 17 - Prob. 17.4.19PACh. 17 - Prob. 17.5.1RQCh. 17 - Prob. 17.5.2RQCh. 17 - Prob. 17.5.3PACh. 17 - Prob. 17.5.4PACh. 17 - Prob. 17.5.5PACh. 17 - Prob. 17.5.6PACh. 17 - Prob. 17.5.7PACh. 17 - Prob. 17.6.1RQCh. 17 - Prob. 17.6.2RQCh. 17 - Prob. 17.6.3RQCh. 17 - Prob. 17.6.4PACh. 17 - Prob. 17.6.5PACh. 17 - Prob. 17.6.6PACh. 17 - The total amount of oil in the earth is not...Ch. 17 - Prob. 17.6.8PACh. 17 - Prob. 17.1CTECh. 17 - Prob. 17.2CTECh. 17 - Prob. 17.3CTE
Knowledge Booster
Similar questions
- The following graph shows the labor market for research assistants in the fictional country of Universalia. The equilibrium wage is $10 per hour, and the equilibrium number of research assistants is 100. 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). Use the graph input tool to evaluate these three proposals. Entering a number into the Tax Levied on Employers field (initially set at zero dollars per hour) shifts the demand curve down by the amount you enter, and entering a number into the Tax Levied on Workers field (initially set at zero dollars per hour) shifts the supply curve up by the amount you enter. To determine the before-tax wage for each tax proposal, adjust the amount in the Wage field until the quantity of labor supplied equals the quantity of labor demanded. You will…arrow_forwardThe following graph shows the labor market for research assistants in the fictional country of Universalia. 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). Use the graph input tool to evaluate these three proposals. Entering a number into the Tax Levied on Employers field (initially set at zero dollars per hour) shifts the demand curve down by the amount you enter, and entering a number into the Tax Levied on Workers field (initially set at zero dollars per hour) shifts the supply curve up by the amount you enter. To determine the before-tax wage for each tax proposal, adjust the amount in the Wage field until the quantity of labor supplied equals the quantity of labor demanded. You will not be…arrow_forwardHow a tax burden is divided between consumers and producers is called tax incidence. Consumers bear most of the tax burden when:arrow_forward
- The following graph gives the labor market for laboratory aides in the imaginary country of Sophos. The equilibrium hourly wage is $10, and the equilibrium number of laboratory aides is 250. Suppose the federal government of Sophos has decided to institute an hourly payroll tax of $4 on laboratory aides and wants to determine whether the tax should be levied on the workers, the employers, or both (in such a way that half the tax is collected from each party). Use the graph input tool to evaluate these three proposals. Entering a number into the Tax Levied on Employers field (initially set at zero dollars per hour) shifts the demand curve down by the amount you enter, and entering a number into the Tax Levied on Workers field (initially set at zero dollars per hour) shifts the supply curve up by the amount you enter. To determine the before-tax wage for each tax proposal, adjust the amount in the Wage field until the quantity of labor supplied equals the quantity of labor demanded. You…arrow_forwardWho should pay the tax? The following graph gives the labor market for laboratory aides in the imaginary country of Paideia. The equilibrium hourly wage is $10 , and the equilibrium number of laboratory aides is 150 . Suppose the federal government of Paideia has decided to institute an hourly payroll tax of $4 on laboratory aides and wants to determine whether the tax should be levied on the workers, the employers, or both (in such a way that hay the tax is collected from each party). Use the graph input tool to evaluate these thret proposal5; Entering a number into the Tax Levied on Employers feld (inibialy set at adro dallars per hour) shilts the demand curve down by the amount you enter, and entering a number into the Tax Leviod on workers fieid (initially set at acro dollas per bour) shifts the supply curve up by the amount your enter. To determine the before-tax wage for each tar proposal, adjust the amcunt in the wage field unbil the quantity of labor supplied…arrow_forwardThe following graph gives the labor market for laboratory aides in the imaginary country of Sophos. The equilibrium hourly wage is $10, and the equilibrium number of laboratory aides is 250. Suppose the federal government of Sophos has decided to institute an hourly payroll tax of $4 on laboratory aides and wants to determine whether the tax should be levied on the workers, the employers, or both (in such a way that half the tax is collected from each party). Use the graph input tool to evaluate these three proposals. Entering a number into the Tax Levied on Employers field (initially set at zero dollars per hour) shifts the demand curve down by the amount you enter, and entering a number into the Tax Levied on Workers field (initially set at zero dollars per hour) shifts the supply curve up by the amount you enter. To determine the before-tax wage for each tax proposal, adjust the amount in the Wage field until the quantity of labor supplied equals the quantity of labor demanded. You…arrow_forward
- The following graph gives the labor market for laboratory aides in the imaginary country of Sophos. The equilibrium hourly wage is $10, and the equilibrium number of laboratory aides is 150. Suppose the federal government of Sophos has decided to institute an hourly payroll tax of $4 on laboratory aides and wants to determine whether the tax should be levied on the workers, the employers, or both (in such a way that half the tax is collected from each party). Use the graph input tool to evaluate these three proposals. Entering a number into the Tax Levied on Employers field (initially set at zero dollars per hour) shifts the demand curve down by the amount you enter, and entering a number into the Tax Levied on Workers field (initially set at zero dollars per hour) shifts the supply curve up by the amount you enter. To determine the before-tax wage for each tax proposal, adjust the amount in the Wage field until the quantity of labor supplied equals the quantity of labor demanded. You…arrow_forwardThe following graph gives the labor market for laboratory aides in the imaginary country of Sophos. The equilibrium hourly wage is $10, and the equilibrium number of laboratory aides is 200. Suppose the federal government of Sophos has decided to institute an hourly payroll tax of $2 on laboratory aides and wants to determine whether the tax should be levied on the workers, the employers, or both (in such a way that half the tax is collected from each party). Use the graph input tool to evaluate these three proposals. Entering a number into the Tax Levied on Employers field (initially set at zero dollars per hour) shifts the demand curve down by the amount you enter, and entering a number into the Tax Levied on Workers field (initially set at zero dollars per hour) shifts the supply curve up by the amount you enter. To determine the before-tax wage for each tax proposal, adjust the amount in the Wage field until the quantity of labor supplied equals the quantity of labor demanded. You…arrow_forwardThe following graph gives the labor market for laboratory aides in the imaginary country of Sophos. The equilibrium hourly wage is $10, and the equilibrium number of laboratory aides is 250. Suppose the federal government of Sophos has decided to institute an hourly payroll tax of $4 on laboratory aides and wants to determine whether the tax should be levied on the workers, the employers, or both (in such a way that half the tax is collected from each party). Use the graph input tool to evaluate these three proposals. Entering a number into the Tax Levied on Employers field (initially set at zero dollars per hour) shifts the demand curve down by the amount you enter, and entering a number into the Tax Levied on Workers field (initially set at zero dollars per hour) shifts the supply curve up by the amount you enter. To determine the before-tax wage for each tax proposal, adjust the amount in the Wage field until the quantity of labor supplied equals the quantity of labor demanded. You…arrow_forward
- Which of the following statements refers to rent seeking? "Laws passed by the federal government often provide benefits for a small number of individuals. These individuals, in turn, have an incentive to contribute to the campaigns of politicians who pass these laws." "The federal government should spend more money on programs that help low income citizens and less money on national defense." "The role of the federal government in the U.S. economy grew significantly after the Great Depression. Government spending and taxes are a much greater proportion of total income today than they were in 1929." "There is an opportunity cost whenever the federal government spends tax revenue. For example, an additional $1 billion spent on national defense means there will be less revenue for highway construction and maintenance or some other program."arrow_forwardThe following graph shows the labor market for research assistants in the fictional country of Collegia. The equilibrium wage is $10 per hour, and the equilibrium number of research assistants is 200. 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). Use the graph input tool to evaluate these three proposals. Entering a number into the Tax Levied on Employers field (initially set at zero dollars per hour) shifts the demand curve down by the amount you enter, and entering a number into the Tax Levied on Workers field (initially set at zero dollars per hour) shifts the supply curve up by the amount you enter. To determine the before-tax wage for each tax proposal, adjust the amount in the Wage field until the quantity of labor supplied equals the quantity of labor demanded. You will not be…arrow_forwardCongress and the president decide that the United States should reduce air pollution by reducing its use of gasoline. They impose a $0.50 tax on each gallon of gasoline sold. Suppose they decided to impose the tax on consumers. In the following graph, shows the effect of a $0.50 tax on each gallon of gasoline sold imposed on consumers by shifting the demand or supply curve. DemandSupply01234563.02.52.01.51.00.50Price of Gasoline (Dollars per gallon)Quantity of Gasoline (Thousands of gallons)Demand Supply True or False: The effect of the tax will be the same regardless of whom the tax is imposed on. True False This tax would be more effective in reducing the quantity of gasoline consumed if the demand for gasoline were elastic. True or False: Consumers of gasoline are helped by this tax. True False Workers in the oil industry are by this tax.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Microeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506756Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning