Question

Calculating the price elasticity of supply Antonio is a retired teacher who lives in Chicago and teaches tennis lessons for extra cash. At a wage of $30 per hour, he is willing to teach 6 hours per week. At $50 per hour, he is willing to teach 16 hours per week. Using the midpoint method, the elasticity of Antonio’s labor supply between the wages of $30 and $50 per hour is approximately , which means that Antonio’s supply of labor over this wage range is

Answer 1

Answer:

E_p = 1.818181818

The supply of labor is elastic as it is higher than 1

Explanation:

mid-point formula:

$E_p =\frac{q_1-q_2}{\frac{q_1+q_2}{2}} \div\frac{p_1-p_2}{\frac{p_1+p_2}{2}}$

q1 6 p1 30

q2 16 p2 50

$E_p =\frac{-10}{\frac{22}{2}} \div\frac{20}{\frac{80}{2}}$

$E_p =\frac{-10}{11} \div\frac{20}{40}$

E_p = -1.818181818