Question

Poornima is a stay-at-home parent who lives in San Francisco and teaches tennis lessons for extra cash. At a wage of $30 per hour, she is willing to teach 3 hours per week. At $50 per hour, she is willing to teach 7 hours per week. Using the midpoint method, the elasticity of Poornima's labor supply between the wages of $30 and $50 per hour is approximately(1.6,0.13,0.63,25) , which means that Poornima's supply of labor over this wage range is (elastic, inelastic)

Answer 1

Answer:

We can deduce that the elasticity of the labor supply is greater than 1 the labor supply is considered elastic

Step-by-step explanation:

The formula to use is the following:

Elasticity = (Change in working hours / Average working hours) / (Change in wage rate / Average wage rate)

we replace the data

Elasticity = [(7 - 3) / (7 + 3) / 2] / [(50 - 30) / (50 + 30) / 2]

Elasticity = [4 / (10/2)] / [20 / (80/2)]

Elasticity = (4/5) / (20/40)

Elasticity = 0.8 / 0.5

OUTCOME

Elasticity = 1.6

We can deduce that the elasticity of the labor supply is greater than 1 the labor supply is considered elastic