Reference no: EM13298635

This is a long question but it's all in one question. Whoever answers it will receive the full credit and ill make another question and just give them credit on that one too because it's so long. If you could either make an excel graph or hand draw it, that'd be awesome.

Assume the demand for labor (on the part of the employers) to be the same irrespective of gender and described by the following demand function.

QD=400-2P

Women's labor supply: QSW=2P

Men's labor supply is fixed: QSM=200

1) Draw two graphs, one showing the labor market for women and the other for men. It is important to plot the curves very accurately and to scale since you will not be asked to calculate equilibria but you will rely on your graph for analysis.

2) In each graph, identify the equilibrium quantity and price (wage) and report their values.

3) For simplicity, lets assume a fixed social security and medicare tax of $40 per day, to be collected from employers. Make appropriate changes in each graph to show the effect of the tax. Clearly identify the new equilibrium.

4) How does the tax affect the equilibrium price and quantity in each market? Report precise values.

Women: PD=gross wage paid by employers=________
PS=net wage received by workers=________
Q'=________

Men: PD=gross wage paid by employers=________
PS=net wage received by workers=________
Q'=________

5) Who pays for the tax? Employers? Workers? Both? Explain.

6) Is there a DWL (dead weight loss) associated with this tax? Explain.