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1. Consider the incidence (or distribution) of the tax payments between employees (suppliers) and employers (demanders). Consider how the incidence would change if the supply curve was more inelastic and/or the demand curve was more elastic. 2. Analyze the impact of a tax on employees, employers, the government, and society as a whole. Explain why the losses in net benefits to employees and employers are larger than their respective shares of the tax payments. 3. Carefully consider whether the government should implement a tax. Analysis of a Tax Wage: $/Hour Quanity of Labour: Hours
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