If a payroll tax of $X per hour is collected from employers,then the
A) labor demand curve shifts down by $\frac { 1 } { 2 }$ $X at any given employment level.
B) labor demand curve shifts down by amount $X at any given employment level.
C) labor supply curve shifts left by $X at any given employment level.
D) labor supply curve shifts down by $X at any given employment level.

Question

Quizplus · Accepted Answer

The labor demand curve shifts down by the amount of the payroll tax ($X) at any given employment level because the cost of hiring an employee increases by $X per hour, making employers willing to pay less for labor (excluding the tax).

If a Payroll Tax of $X Per Hour Is Collected 12\frac { 1 } { 2 }21​

If a Payroll Tax of $X Per Hour Is Collected $\frac { 1 } { 2 }$