Question: Some economists argue that taxing capital has the benefit of increasing employment and wages because such taxes increase the demand for labor. Use an isoquant/isocost

Some economists argue that taxing capital has the benefit of increasing employment and wages because such taxes increase the demand for labor. Use an isoquant/isocost diagram to illustrate that the validity of this claim requires that the substitution effect be larger than the scale effect brought about by the tax on capital.

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