The figure given below shows the demand and supply curves of labor.A per-unit tax imposed on the wage income of the employees shifts the supply curve of labor upward.
-In Figure 18-2,as a result of a per-unit tax:
A)the total wage paid by employers rises,while the net-wage received by employees declines.
B)the total wage paid by employers declines,while the net-wage received by the employees rises.
C)the total wage paid by employers declines.
D)the total wage received by employees decline.

Question

The figure given below shows the demand and supply curves of labor.A per-unit tax imposed on the wage income of the employees shifts the supply curve of labor upward. 
-In Figure 18-2,as a result of a per-unit tax:
A)the total wage paid by employers rises,while the net-wage received by employees declines. 
B)the total wage paid by employers declines,while the net-wage received by the employees rises. 
C)the total wage paid by employers declines. 
D)the total wage received by employees decline.

Quizplus · Accepted Answer

When a per-unit tax is imposed on wage income, it increases the cost of hiring workers for employers, which shifts the supply curve of labor upward. As a result, the equilibrium quantity of labor decreases, and the wage rate paid by employers increases. However, the net wage received by employees decreases because they now have to pay the tax out of their earnings, resulting in a decline in their take-home pay. Therefore, choice A is the correct answer.

The Figure Given Below Shows the Demand and Supply Curves