-The figure above shows the labor supply and labor demand curves for personal trainers in the state of Florida.The initial equilibrium hourly wage is $10.Suppose the state of Florida institutes an income tax on labor income of $6 an hour in order to buy voting machines for the next election.How much of the tax is paid by employers?

Question

Quizplus · Accepted Answer

The tax is a wedge between the labor supply and labor demand curves. The new equilibrium wage is $12, and the new equilibrium quantity is 100. The tax revenue is $600, which is equal to the tax rate of $6 multiplied by the new equilibrium quantity of 100. The employers pay half of the tax, which is $300.

-The Figure Above Shows the Labor Supply and Labor Demand