Respuesta :
Answer:
0.5
Explanation:
Given: Wages was $10 per hour.
Labor supply= 30 hours per week.
New wages= $12 per hour
New labor supply= 33 hours per week.
Elasticity of labor supply is calculated to know the response of labor supply due to change in wage rate in a given period of time.
Formula; Elasticity of labor supply= [tex]\frac{\% change\ in\ labor\ supply}{\% change\ in\ wage\ rate}[/tex]
First finding the percentage change in labor supply.
⇒ [tex]\% change\ in\ labor\ supply= \frac{33-30}{30} \times 100[/tex]
⇒ [tex]\% change\ in\ labor\ supply= \frac{3}{3} \times 10[/tex]
∴ [tex]\% change\ in\ labor\ supply= 10[/tex]
now, finding percentage change in wage rate
⇒ [tex]\% change\ in\ wage\ rate= \frac{12-10}{10}\times 100[/tex]
⇒ [tex]\% change\ in\ wage\ rate= 2\times 10[/tex]
∴ [tex]\% change\ in\ wage\ rate= 20[/tex]
Next, finding the elasticity of labor supply.
Elasticity of labor supply= [tex]\frac{10}{20}[/tex]
∴ Elasticity of labor supply = [tex]0.5[/tex]
Hence, 0.5 is the elasticity of labor supply.
