suppose the government imposes a payroll tax of $2 per hour of work and collects the tax from…

suppose the government imposes a payroll tax of $2 per hour of work and collects the tax from employers.\nuse the line drawing tool in the figure to draw and label a curve that reflects the payment, by employers, of the $2 per hour tax.\ncarefully follow the instructions above, and only draw the required object.

suppose the government imposes a payroll tax of $2 per hour of work and collects the tax from employers.\nuse the line drawing tool in the figure to draw and label a curve that reflects the payment, by employers, of the $2 per hour tax.\ncarefully follow the instructions above, and only draw the required object.

Answer

Explanation:

Step1: Shift demand curve down by $2

A payroll tax on employers reduces the effective demand for labor, so we shift the original demand curve $D_1$ downward by $2 at every quantity.

  • Original $D_1$ points: (0, 18), (8, 2)
  • New demand curve points: (0, $18-2=16$), (8, $2-2=0$)

Step2: Label new curve as $D_2$

Draw a straight line connecting the new points (0,16) and (8,0), and label this new curve $D_2$ (or $D_{tax}$) to represent employers' after-tax labor demand.

Answer:

A new downward-shifted demand curve (labeled e.g., $D_2$) is drawn parallel to $D_1$, with all wage values $2 lower than the original $D_1$ at each corresponding quantity of labor. The line connects (0, 16) and (8, 0) on the graph.