Question

Bob is a retired teacher who lives in Philadelphia and provides math tutoring for extra cash. At a wage of $50 per hour, he is willing to tutor 7 hours per week. At $65 per hour, he is willing to tutor 10 hours per week.Using the midpoint method, the elasticity of Bob’s labor supply between the wages of $50 and $65 per hour is approximately ___ , which means that Bob’s supply of labor over this wage range is ___ .

Answer 1

Answer:

Explanation:

$50; $65

7h:10h

Elasticity of labor supply:

(10-7)/(65-50)   *   (50+65)/(7+10) = 3/15   *  115/17 =1.35

So elasticity of labor supply is 1.35, elastic