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Yuliya22 [10]
3 years ago
9

Hubert is a stay-at-home parent who lives in New York City and teaches tennis lessons for extra cash. At a wage of $35 per hour,

he is willing to teach 4 hours per week. At $45 per hour, he is willing to teach 8 hours per week. Using the midpoint method, the elasticity of Jake’s labor supply between the wages of $50 and $65 per hour is approximately ___ , which means that Jake’s supply of labor over this wage range is ___ .
Business
1 answer:
kkurt [141]3 years ago
4 0

Answer and Explanation:

The computation of the midpoint elasticity is as follows;

Midpoint elasticity

= (Change in labor supplied ÷ Average labor supplied) ÷ (Change in wage rate ÷ Average wage rate)

= [(8 - 4) ÷ (8 + 4) ÷ 2] ÷ [$($45 - $35) ÷ $($45 + $35) ÷ 2]

= [4 ÷  (12 ÷ 2)] / [$10 ÷ ($80 ÷ 2)]

= (4 ÷ 6)  ÷ ($10 / $40)

= 0.67 ÷ 0.25

= 2.68

As the elasticity is more than 1 so the supply of labor should be elastic

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Option A.

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The following standards for variable manufacturing overhead have been established for a company that makes only one product: Sta
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