Question

11. Calculating the price elasticity of supply Deborah is a college student who lives in San Francisco and does some consulting work for extra cash. At a wage of $30 per hour, she is willing to work 3 hours per week. At $50 per hour, she is willing to work 7 hours per week. Using the midpoint method, the elasticity of Deborah’s labor supply between the wages of $30 and $50 per hour is approximately , which means that Deborah’s supply of labor over this wage range is

Answer 1

Answer: 1.60

Step-by-step explanation:

P1 = 30

P2 =50

Q1 = 6

Q2 = 16

Elasticity of supply:

`=((7-3))/((50-30))*((50+30))/((7+3))`

`=(4)/(20)*(80)/(10)`

= 1.60

Using the midpoint method, the elasticity of Deborah’s labor supply between the wages of $30 and $50 per hour is approximately 1.60, which means that Deborah’s supply of labor over this wage range is elastic.