Suppose that the supply curve for bus drivers is w=200+.02L and the demand curve for bus drivers is w=2800-.02L, where L = number of bus drivers and w= the wage.
a. Sketch the supply curve the demand curve. Be sure to indicate the equilibrium wage and demand for labor in the diagram.
b. Calculate the equilibrium wage and labor demand.
Suppose the government imposes a $100 tax on the employer.
c. Show this change in your diagram.
d. What wage will the employer pay?
e. What wage will the employee receive?
f. Who bears the biggest burden of the tax?