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Chapter 5: Q. 23 (page 130)

What is the formula for the wage elasticity of labor supply?

Short Answer

Expert verified

The formula for the wage elasticity of labor supply is%changeinquantityoflaborsupplied%changeinwage

Step by step solution

01

Step 1. Wage elasticity of labor supplied

Wage elasticity of labor supplied refers to the amount of labor supplied changing in response to a change in wage.

02

Step 2. Formula

Both changes are expressed as a percentage change. The ratio of percentage change in the quantity of labor supplied to percentage change in wage, as described below, is the formula for wage elasticity of supply.wageelasticityofsupply=%changeinquantityoflaborsupplied%changeinwage

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