Assignment task: In the flight crew market, the supply of labor is measured as ??s = 120 + 30?? and demand by labor ??d = 480 -10??, where L is labor and w is wages.
a) Find a balance in this labor market. What is the salary and how many people are employed work?
Now the government has decided to impose a tax on the salaries of flight crews in the amount of 4 per person working hours
b) What is the current equilibrium in this labor market?
c) How much of the tax is paid by the flight crews? Explain.
If instead we assume that the supply of labor is ??s = 320.
d) What is the current equilibrium in this labor market?
e) If a tax were imposed on this labor market (same as above), who would pay the tax Explain.