Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
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Question
Chapter 7, Problem 4QE
To determine
Estimate the elasticity of County U’s labor supply to be 3.
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If government officials are mainly interested in generating tax revenue, then they should tax goods for which demand is price elastic.
Question 11Select one:
True
False
Assume that the supply of low-skilled workers is fairly elastic, but the employers’ demand for such workers is fairly inelastic. If the policy goal is to expand employment for low-skilled workers, is it better to focus on policy tools to shift the supply of unskilled labor or on tools to shift the demand for unskilled labor? Sketch a graph to help compare and contrast the two options.
The concept of elasticity is used to
Analyze how much the economy can expand
Determine the level of government invention in the economy
Analyze supply and demand with greater precision
Calculate consumer credit purchases
The increase in demand that will occur from a change in one of the nonprice determinants of demand
Chapter 7 Solutions
Microeconomics
Ch. 7.1 - Prob. 1QCh. 7.1 - Prob. 2QCh. 7.1 - Prob. 3QCh. 7.1 - Prob. 4QCh. 7.1 - Prob. 5QCh. 7.1 - Prob. 6QCh. 7.1 - Prob. 7QCh. 7.1 - Prob. 8QCh. 7.1 - Prob. 9QCh. 7.1 - Prob. 10Q
Ch. 7 - Prob. 1QECh. 7 - Prob. 2QECh. 7 - How is elasticity related to the revenue from a...Ch. 7 - Prob. 4QECh. 7 - Prob. 5QECh. 7 - Prob. 6QECh. 7 - Prob. 7QECh. 7 - Prob. 8QECh. 7 - Prob. 9QECh. 7 - Prob. 10QECh. 7 - Prob. 11QECh. 7 - Prob. 12QECh. 7 - Prob. 13QECh. 7 - Prob. 14QECh. 7 - Prob. 15QECh. 7 - Prob. 16QECh. 7 - Prob. 17QECh. 7 - Prob. 18QECh. 7 - Prob. 19QECh. 7 - Prob. 20QECh. 7 - Prob. 21QECh. 7 - Prob. 22QECh. 7 - Prob. 1QAPCh. 7 - Prob. 2QAPCh. 7 - Prob. 3QAPCh. 7 - Prob. 4QAPCh. 7 - Prob. 5QAPCh. 7 - Prob. 1IPCh. 7 - Prob. 2IPCh. 7 - Prob. 3IPCh. 7 - Prob. 4IPCh. 7 - Prob. 5IPCh. 7 - Prob. 6IP
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Similar questions
- give an explanation to the following statements: The higher the elasticity of supply in the labor market, the closer would budgetary expenditure be as a proxy for the social cost of a project.arrow_forwardAccording to studies undertaken by the U.S. department of agriculture, the price elasticity of demand for cigarettes is between -0.3 and -0.4. Suppose congress, influenced by studies linking cigarette smoking to cancer plans to raise the excise tax in cigarettes so the price rises by 10 percent. The expected effect the price increase will have on cigarette consumption is?arrow_forward．How does elasticity affect the burden of a tax? Justify your answer using supply and demand diagrams.arrow_forward
- Which of the following, if true, would most effectively undermine the argument that raising cigarette taxes reduces the number of people who smoke cigarettes? a.The supply for cigarettes is relatively inelastic. b.The demand for cigarettes is relatively inelastic. c.The supply for cigarettes is relatively elastic. d.The demand for cigarettes is relatively elastic.arrow_forwardAssume that the supply of low-skilled workers is fairly elastic, but the employers’ demand for such workers is fairly inelastic. If the policy goal is to expand employment for low-skilled workers, is it better to focus on policy tools to shift the supply of unskilled labor or on tools to shift the demand for unskilled labor? What if the policy goal is to raise wages for this group? Explain your answers with supply and demand diagrams.arrow_forwardA conservative critic of government programs has written Governments know A conservative critic of government programs has written, “Governments know how to do one thing well. They know how to create shortages and surpluses.” Explain this quotation using examples like the minimum wage or interest-rate ceilings. Show graphically that if the demand for unskilled workers is price-elastic, a minimum wage will decrease the total earnings (wage times quantity demanded of labor) of unskilled workers. A conservative critic of government programs has written Governments knowarrow_forward
- In a study, by economist Paul Gertler and Jacques van der Gaag, it was found that the price elasticity of demand for hospital services in Peru was 0.67 among poor households and 0.29 among wealthy households. What will be the impact on poor and wealthy households of a government decision to increase the price of hospital services by 10%.arrow_forwardGovernments tend to like to tax goods with inelastic demands. Why?arrow_forwardIn the city of Growville, the equilibrium employment is 100,000 workers, and the equilibrium wage is $100 per day. The elasticity of demand for labor is 1.0 (in absolute value) and the elasticity of supply of labor is 5.0. The employment multiplier is 2.0. Suppose the demand for labor used in the production of exports increases by 6,000 jobs. a. Use a supply-demand graph of the urban labor market to show the effects of the increase in the demand for labor. b. The equilibrium wage [increases, decreases] by percent (to ) computed as. . . . c. The equilibrium employment [increases, decreases] by percent (to workers), computed as. . .arrow_forward
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