Managerial Economics & Business Strategy (Mcgraw-hill Series Economics)
9th Edition
ISBN: 9781259290619
Author: Michael Baye, Jeff Prince
Publisher: McGraw-Hill Education
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Chapter 2, Problem 23PAA
To determine
To explain:
Whether the governor’s plan to reduce juvenile delinquency is effective or not.
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Becky is a stay-at-home parent who lives in Miami and teaches tennis lessons for extra cash. At a wage of $35 per hour, she is willing to teach 8 hours per week. At $40 per hour, she is willing to teach 14 hours per week.
Using the midpoint method, the elasticity of Becky’s labor supply between the wages of $35 and $40 per hour is approximately , which means that Becky’s supply of labor over this wage range is .
A study of the effects of the minimum wage on employment of low-skilled workers estimated the price elasticity of demand for low-skilled workers is -0.75. Suppose that the government is considering raising the minimum wage from $7.25 per hour to $7.75 per hour. Based on this information, calculate the percentage change in the employment of low skilled workers. Use the midpoint formula?
Eric is a stay-at-home parent who lives in New York City and provides math tutoring for extra cash. At a wage of $50 per hour, he is willing to tutor 2 hours per week. At $75 per hour, he is willing to tutor 6 hours per week.
Using the midpoint method, the elasticity of Eric’s labor supply between the wages of $50 and $75 per hour is approximately , which means that Eric’s supply of labor over this wage range is .
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