Question
In: Economics
(R & G) In an economy, the supply curve of labor, S, is given by S...
(R & G) In an economy, the supply curve of labor, S, is given by
S = - 100 + 200 Wn
where Wn is the after-tax wage rate. Assume that the
before-tax wage rate is fixed at 10.
(a) Write a formula for tax revenues as a function of the tax rate,
and sketch the function in a diagram with the tax rate on the
horizontal axis and tax revenues on the vertical axis. (wn = (1 -
t)10 where t is the tax rate.) Suppose that the government
currently
imposes a tax rate of 70 percent. What advice would you give
it?
(b) At what tax rate are tax revenues maximized in this
economy?
Solutions
Rahul Sunny answered 10 months agoRelated Solutions
A monopsonist faces a labor supply curve given by L s = −400 + 0.01w ,...
A monopsonist faces a labor supply curve given by L s = −400 +
0.01w , where w is the annual salary.
(a) What is the lowest salary the firm can pay yet still induce
one worker to want to work for the firm? What is lowest salary the
firm must pay to induce two workers to work for the firm?
(b) What is the marginal cost to the firm of adding a second
worker given that it must pay...
Question 1: The labor supply curve is given by: ES = 40w The labor demand curve is given...
Question 1:
The labor supply curve is given by: ES
= 40w
The labor demand curve is given by: ED = 1800 -
20W
1.a) At what wage W* and employment level E* will the market be
in equilibrium?
1.b) On the graph below, draw the supply curve (label it S), the
demand curve (label it D). Indicate clearly where each curve
intersects the horizontal and vertical axis. On your graph, clearly
indicate where equilibrium price W* and quantity E* are.
Now...
The demand curve for labor facing a monopsonist is given as W=35-6L. The labor supply curve...
The demand curve for labor facing a monopsonist is given as
W=35-6L. The labor supply curve is W=3+L, where W represents the
hourly wage and L the number of person hours hired.
a) Write out the formula for the monopsonist's marginal labor
cost curve?
b) What is the optimal quantity of labor hired by the
monopsonist?
c) Determine the optimal wage paid by the monopsonist.
Consider the case where the demand curve and supply curve for unskilled labor are given in...
Consider the case where the demand curve and supply curve for
unskilled labor are given in the following table:
(1) Wage Rate (/hour)
(2) Wage Rate2 (/hour) (employer pays tax)
(3) Q of Labour Demanded (hrs/week)
(4) Wage Rate2 (/hour)
(5) Q of Labour Supplied (hrs/week)
8.5
10
1000
1900
8
9.5
1200
1800
7.5
9
1400
1700
7
8.5
1600
1600
6.5
8
1800
1500
6
7.5
2000
1400
5.5
7
2200
1300
Employment insurance premium is paid in...
In an economy, the supply of labour is given by S = 10 + 200Wn, where...
In an economy, the supply of labour is given by S = 10 + 200Wn,
where S is the quantity supplied of labour (hours of work), and Wn
is the after-tax wage rate (net wage). Assume that the before-tax
wage rate is fixed at $10.
a) Find the quantity supplied of labour and the total tax
revenue at the following tax rates: 15%, 30%, 50%, 70%, and 80%.
b) Calculate the net wage elasticity of labour supply at each of...
In an economy, the supply of labour is given by S = 10 + 200Wn, where...
In an economy, the supply of labour is given by S = 10 + 200Wn,
where S is the quantity supplied of labour (hours of work), and Wn
is the after-tax wage rate (net wage). Assume that the before-tax
wage rate is fixed at $10.
a) Find the quantity supplied of labour and the total tax
revenue at the following tax rates: 15%, 30%, 50%, 70%, and 80%.
b) Calculate the net wage elasticity of labour supply at each of...
In an economy, the supply of labour is given by S = 10 + 200Wn, where...
In an economy, the supply of labour is given by S = 10 + 200Wn,
where S is the quantity supplied of labour (hours of work), and Wn
is the after-tax wage rate (net wage). Assume that the before-tax
wage rate is fixed at $10.
a) Find the quantity supplied of labour and the total tax
revenue at the following tax rates: 15%, 30%, 50%, 70%, and
80%.
b) Calculate the net wage elasticity of labour supply at each of...
The market supply curve for labor is upward sloping and the market demand curve for labor...
The market supply curve for labor is upward sloping and
the market demand curve for labor is downward sloping yet for a
single firm the demand curve is flat. Explain.
I really dont need the answer, but if someone could explain what
this is asking. I get that the market supply curve slopes upward
and the demand curve slopes downward, but what exactly is the
question getting at when it says a single firm is flat. Is it
referring to...
A monopsonist has a labor supply curve of =10+L and marginal product of labor curve of...
A
monopsonist has a labor supply curve of =10+L and marginal product
of labor curve of 20-L. If the price is set to 8, what is the wage
the monopsonist has to pay?
Draw a steep labor supply curve and a less steep labor demand curve on a set...
Draw a steep labor supply curve and a less steep labor demand
curve on a set of axes. Now suppose demand decreases. Label the old
and new equilibria. Draw a cobwebbing path to show how wages and
quantities of labor evolved to get from the old equilibrium to the
new equilibrium.
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