Refer to the Graph for the Labor Market

Multiple Choice

Refer to the graph for the labor market. The government decides to impose a wage tax as shown on the graph. The result is that

A) more workers enter the labor market due to the higher wage rate being paid.
B) the employers and laborers will split the tax evenly, each paying $0.25 to the government.
C) the wage received by laborers will rise to $5.40 and the labor cost to employers will fall to $4.90.
D) the wage received by laborers will fall to $4.90 and the labor cost to employers will rise to $5.40.