If Sara's Elasticity of Labor Supply Is 1

question 102

Multiple Choice

If Sara's elasticity of labor supply is 1.5 and she increases her supply of labor by 5 percent,then the wage rate must have

• A)Increased by 3.3 percent.
• B)Increased by 3.0 percent.
• C)Increased by 7.5 percent.

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Definitions:

Market Economy

An economic system in which economic decisions and the pricing of goods and services are guided solely by the aggregate interactions of a country's citizens and businesses.

Relative to Demand

This refers to how the availability or desire for a product or service is influenced by consumer demand.

Price Controls

Government-imposed limitations on the prices that can be charged for goods and services in a market.

Energy Products

Energy products refer to commodities used for generating power, such as petroleum, natural gas, coal, and renewable energy sources.