Question

Ginny is a college student who lives in Detroit and provides math tutoring for extra cash. At a wage of $50 per hour, she is willing to tutor 10 hours per week. At $65 per hour, she is willing to tutor 19 hours per week. Using the midpoint method, the elasticity of Ginny’s labor supply between the wages of $50 and $65 per hour is approximately , which means that Ginny’s supply of labor over this wage range is .

Answer 1

Answer: Approximately 2.37

Elastic over this range

Explanation: As we know that, as per the midpoint method elasticity of supply is calculated as :-

`Elasticity\:=\:(Q2-Q1)/(P2-P1)* (P2+P1)/(Q2+Q1)`

where,

Q2 = 19

Q1 = 10

P2 = 65

P1 = 50

now, putting the values into equation we get :-

`Elasticity\:=\:(19-10)/(65-50)* (65+50)/(10+19)`

= 2.37

So, we can say that over this range Ginny's supply is elastic .