Question 1
Refer to the information provided in Figure 19.1 below to answer the question(s) that follow.
Refer to Figure 19.1. Initially after the payroll tax is imposed, the difference in the firm's cost per unit of labor and the workers' take home pay is ________ per hour.
◦ $2
◦ $3
◦ $5
◦ $7
Question 2
Refer to the information provided in Figure 19.1 below to answer the question(s) that follow.
Refer to Figure 19.1. After firms can respond to the payroll tax, the per-hour equilibrium wage paid by firms ________ compared to the original equilibrium wage.
◦ increases by $5
◦ increases by $3
◦ decreases by $5
◦ decreases by $2
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