Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Chapter 5, Problem 5.2P
To determine
The impact of increase in tax.
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Suppose Hinterland has been a closed economy (meaning there is no immigration from foreign countries and no international trade). The current labor force has 4 million skilled workers and 8 million unskilled workers. Both types of labor have perfectly inelastic supply curves, and the current skilled-unskilled wage ratio is 2.5. The elasticity of demand of skilled labor is -0.4, while the elasticity of demand of unskilled labor is -0.1. Suppose Hinterland allows a brief period of immigration, during which time 1 million skilled workers and 4 million unskilled workers migrate to Hinterland. Suppose there are no other changes to the economy. Approximately what is the new skilled-unskilled wage ratio? (Hint: The percent change in the wage ratio is approximately equal to the percent change in the skilled wage minus the percent change in the unskilled wage.)
Q38
In the Canadian labour market, demand for labour can be impacted by elasticity of the product in which labour is an input. What will the elasticity of factor demand be if unit wages rise by 5 percent and the number of employed workers falls by 9 percent?
Multiple Choice
1.67.
0.56
1.80
2.36
3.00
Alyssa is a university student who lives in Vancouver and does some consulting work for extra cash. At a wage of $40 per hour, she is willing to work 7
hours per week. At $50 per hour, she is willing to work 10 hours per week.
Using the midpoint method, the elasticity of Alyssa's labour supply between the wages of $40 and $50 per hour is approximately
which
means that Alyssa's supply of labour within this wage range is
Chapter 5 Solutions
Principles of Economics (12th Edition)
Ch. 5 - Prob. 1.1PCh. 5 - Prob. 2.1PCh. 5 - Prob. 2.2PCh. 5 - Using the midpoint formula, calculate elasticity...Ch. 5 - A sporting goods store has estimated the demand...Ch. 5 - For each of the following scenarios, decide...Ch. 5 - For the following statements, decide whether you...Ch. 5 - Taxicab fares in most cities are regulated....Ch. 5 - Studies have fixed the short-run price elasticity...Ch. 5 - Prob. 2.9P
Ch. 5 - Prob. 2.10PCh. 5 - Prob. 2.11PCh. 5 - [Related to the Economics in Practice on p. 99] At...Ch. 5 - Prob. 3.2PCh. 5 - Prob. 4.1PCh. 5 - Prob. 4.2PCh. 5 - The cross-price elasticity values for three sets...Ch. 5 - Prob. 4.4PCh. 5 - World famous Burpee Beer is brewed in the small...Ch. 5 - Prob. 5.2P
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