Question

Musashi is a stay-at-home parent who lives in San Diego and teaches tennis lessons for extra cash. At a wage of $40 per hour, he is willing to teach 7 hours per week. At $50 per hour, he is willing to teach 10 hours per week. Using the midpoint method, the elasticity of Musashi's labor supply between the wages of $40 and $50 per hour is approximately,which means that Musashi's supply of labor over this wage range is

Answer 1

Suppose that there is a person- Person M. At wage of $40 per hour, he is willing to teach 7 hours per week and at wage of $50 per hour, he is willing to teach 10 hours per week. The following formula is used to calculate the elasticity of demand. price elasticity of demand o change in quantity supplied % change in wages (Q-9) TQQ (W -W. ( WW) L 2 W1 = $40 Q1 = 7 W2= $50 Q2 = 10 Find the elasticity of labor supply. % change in quantity supplied elasticity of labor supply = % change in wages (10-7) (10+7) (50-40 (50+40) sis siw glaisia - 1.59 Thus, elasticity of labour supply is 1.59. Using the midpoint method, the elasticity of Musashi's labour supply between the wages of $40 and $50 per hour is approximately 1.59 which means that Musashi's supply of labour over this wage range is elastic.