Suppose in the Absence of a Tax a Firm Employs

Multiple Choice

Suppose in the absence of a tax a firm employs 50 skilled workers at a wage rate of $20 per labor hour.If the supply of labor is perfectly inelastic,what will be the impact of a $2.50 per hour tax on the net wage received by the workers and total employment?

A) The net wage received by workers will be $17.50 per labor hour but total employment will not change.
B) The net wage received by workers will be $15 per labor hour and total employment will reduce to 25 workers.
C) The net wage received by workers will be $1750 per labor hour and total employment will reduce to 45 workers.
D) The net wage received by workers will be $15 per labor hour and total employment will increase to 75 workers.