Question: Suppose that the federal government is considering the introduction of a new payroll tax to pay for skyrocketing health care costs. Payroll taxes are typically “paid” by the employer, and are a percentage of an employee’s salary. Show graphically how this tax will impact the levels of employment and wages relative to the equilibrium in the absence of the tax, and explain your graph. Briefly, how do the relative elasticities of the demand and supply curves for labour affect how the burden of the payroll tax is distributed between employees and employers? (8 points)