explain why The elasticity of demand for labor is higher the higher the elasticity of supply of the substitutable input.
Elasticity of demand of any good highly depends on substitutability of the good . Higher the elasticity of supply of the substitutable goods means supply of such goods is highly responsive to price changes . Let us assume substitutable input is capital . It means as rental rate rises by one unit or one dollar , supply of capital rises by more than one dollar . So producers find it easy to procure more and more capital by spending just a few dollars .
Thus producers try to use capital more as inputs if elasticity of supply rises further and thus less of labor , which can substituted by capital . So elasticity of demand for labor rises . For a slight rise in wage level , quantity demanded for labor falls much below because now producers can get capital easily .
explain why The elasticity of demand for labor is higher the higher the elasticity of supply...
*provide an explanation/reasoning for each answer The own-wage elasticity of labor demand is higher when no other inputs can easily be substituted for labor. the demand for the output good is less elastic. the supply of other inputs is more elastic the costs of labor are a smaller share of total production costs. none of the above Another input is more likely to be a substitute for labor if the demand for the output good is less elastic. the supply...
Is the price elasticity of labor supply more or less elastic in higher paying jobs?
5. Explain the relationship between the elasticity of supply of capital and the elasticity of demand for labour. 6. Diagrammatically show the case of an individual who completely stops labour supply due to an increase in the level of non-labour income.
(8 marks total) QUESTION 11 a) Why are both the price elasticity of demand and the price elasticity of supply likely to be greater in the long run? (3 marks) b) Choose a good and draw both a demand and supply curve for that good. Explain and show how an increase in household income would affect the equilibrium price and quantity. (5 marks) QUESTION 12 A firm will continue producing in the short run even if it is making a...
The flatter the demand curve, the ________. lower the elasticity of demand higher the elasticity of demand
(10 points) What is cross-wage elasticity of labor demand? What influence cross-wage elasticity of labor demand? Explain each fully. factors 6.
Describe the price elasticity of supply or demand of laptops at Walmart. Explain how two non price factors that impact the demand of the laptops. Explain how two non price factors impact the supply of laptops. Define the industry and the market equilibrium associated with laptops. Predict the effect of changes in supply and demand on the market equilibrium.
Q2. a. Explain why the price elasticity of demand is negative and why economists generally ignore the sign. b. Explain why the price elasticity of demand varies along a linear downward sloping demand curve. c. Explain why the income elasticity of demand for swimming pools in Australia would be important for Australian swimming pool manufacturers given: i. A substantial decrease in Australian income tax rates ii. A forecast recession
In your own words, explain why a simple market demand of labor curve and a simple market supply of labor curve seem to form the letter 'X'. Explain what is happening at the cross of the 'X', or where the labor demand and labor supply curves intersect.