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If the price elasticity of demand for labor is 0.2 and the wage increased from $11 to $16 an hour, what is the predicted decrease in the level of employment in percentage terms?

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter14: Wages, Unions, And Labor

Section: Chapter Questions

Problem 2QP

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Question

If the price elasticity of demand for labor is 0.2
and the wage increased from $11 to $16 an
hour, what is the predicted decrease in the level
of employment in percentage terms?

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