Help! (d) What is the optimal tax t* that maximizes the tax revenue R?(e) Suppose the government cares about the worker's after-tax income andmaximizes R+ (1 − t)wL. What is the new optimal tax? What is the rela-tionship between wage and the tax? 3.t)wL--A worker chooses labor supply L to maximize his payoff: (1L² in which t is the tax rate, w is the wage per hour. The govern-ment chooses a tax rate t to maximize tax revenue R = tWL.

Detailed explanation:Worker's Decision on Labor SupplyObjective Function Analysis: The worker's…

Answered: (d) What is the optimal tax t* that…

Macroeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506756

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

ChapterST2: The Economics Of Social Security

Section: Chapter Questions

Problem 6CQ

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If the tax elasticity of labor supply is 0.24, by what percentage will the quantity of labor supplied increase in response to a. a $500 per person income tax rebate?multiple choice A 4.8 percent increase A 1.2 percent increase No increase A 2.4 percent increase b. a 9 percent reduction in marginal tax rates? %
Suppose a tax on wages is passed to finance a government program. The legislation orders a tax of 12.4% on per hour wage earnings with 6.2% to be paid by employers and 6.2% to be paid by workers. Assume labor supply is more inelastic than labor demand. Under these assumptions, describe the economic burden of the tax? a.The economic burden will be fully on workers. b. The economic burden will be fully on employers. c. The economic burden will be distributed in equal amounts to workers and employers. d. The economic burden will be mostly on workers and less on employers.
Q1 Explain with the help of a figure for a labor market what we mean by the employees paying part of a tax that is imposed on the companies that demand labor. For simplicity, you can look at a unit tax on labor. Explain in particular what determines how much of the tax is paid by the employees. Q2 a) A project has an expense of NOK 90 million today and is expected to generate a profit of NOK 200 million in 20 years. Set up the expression for the present value of the project. Use the table below to find out if projects are profitable for (i) an interest rate of 3%, (ii) an interest rate of 5% b) A preventive health measure requires an investment of NOK 100 million today, but is expected to provide an annual gain of NOK 5 million in the foreseeable future. At what interest rates are the project profitable?
The Earned Income Tax Credit (EITC) is a form of negative tax that increases the incomes of workers with earnings but is eventually phased out to zero as earnings rise above a certain level. true or false? a. true b. false
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If government spending is paid for with lump-sum taxes, then in the competitive equilibrium: MRSI.C = MRSCI MRTI,c# MPN MRT,C = MRS,C MPN + W
If older workers have a tax elasticity of labor supply equai to 014, by how much will their work activity decline when they reach the Social Security earnings test limit? (Recall that the Social Security earnings test limit is 50 percent. Assume explicit taxes of 20 percent below that limit. Use the midpoint method.) Instructions: Enter your response as a positive percent rounded to one decimal place. Do not include a negative sign () with your answer.
Suppose demand for labor is given by the equation Pp = 25 - 2Qp and supply for labor is given by the equation Ps = 5 + 2Qs. Price is the hourly wage rate in dollars and quantity measures the number of workers. Imposing a minimum wage of $17 by government will O create a labor surplus of 2 and firms will hire 5 workers. O create unemployment of 0 and firms will hire 4 workers. create a labor shortage of 0 and firms will hire 5 workers. O create unemployment of 2 and firms will hire 4 workers. 42. ans 20 MacBook Air 30 F3 esc F1 F2 F4 F5 $ % 4 6. Q W E R Y tab A S D F G ps lock # 3
Its is known that the demand function for a product is P = 24 - 1/2Q and the supply function Q = 4 + 2PIts is known that the demand function for a product is P = 24 - 1/2Q and the supply function Q = 4 + 2P D. If the government provides a subsidy for tge product of Rp 10/ unit of goods, what is the price and quantity of goods in balance new *Rp : Indonesian currency
Consider a perfectly competitive labor market with a very inelastic supply of labor. If a payroll tax is implemented, who would bear a larger portion of the tax burden? a.Mostly by the employer. b.Mostly by the employee. c.Split fairly evenly between the employer and the employee.
The demand and supply of unskilled labour are estimated by Ld = 550-25W and Ls -500 + 5OW, respectively, where L is millions of hours of labour and W is the wage rate. If the government introduces a minimum wage of $18, the surplus of labour would be Seled one OA none of the choces OB 225 OC 75 OD. 50

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