Chapter 5: Q. 23 (page 130)
What is the formula for the wage elasticity of labor supply?
The formula for the wage elasticity of labor supply is
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What is the price elasticity of supply? Can you explain it in your own words?
The supply of paintings by Leonardo Da Vinci, who painted the Mona Lisa and The Last Supper and died in 1519, is highly inelastic. Sketch a supply and demand diagram, paying attention to the appropriate elasticities, to illustrate that demand for these paintings will determine the price.
From the data in Table 5.5 about demand for smart phones, calculate the price elasticity of demand from: point B to point C, point D to point E, and point G to point H. Classify the elasticity at each point as elastic, inelastic, or unit elastic.
| Points | P | Q |
| A | 60 | 3,000 |
| B | 70 | 2,800 |
| C | 80 | 2,600 |
| D | 90 | 2,400 |
| E | 100 | 2,200 |
| F | 110 | 2,000 |
| G | 120 | 1,800 |
| H | 130 | 1,600 |
Table 5.5
In a market where the supply curve is perfectly
inelastic, how does an excise tax affect the price paid by
consumers and the quantity bought and sold?
Describe the general appearance of a demand or a supply curve with zero elasticity.
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