Question

d)In what types of labor markets might labor supply be relatively wage elas - tic? In what types of markets might labor supply be relatively wage inelastic?

e) In what types of labor markets might labor demand be relatively wage elastic? In what types of markets might labor demand be relatively wage inelas tic?

Answer 1

d) In relatively lower -skilled job , the labor supply is elastic in nature because a large pool of labor is available to be employed at a fairly constant market wage rate . This kind of labor is more readily available .

Whereas in case of skilled labor , jobs requiring specific skills and training the labor supply will be more inelastic .

e) When labor expenses are high proportion of total cost ( labor intensive sectors ) , also when large amount of labor is available and substitution is easy . This is labor market demand will be elastic .

When availability is less , skilled labor required , in such cases it will be inelastic .