In a Recession,there Are Many Unemployed Workers

question 155

Essay

In a recession,there are many unemployed workers.Employers find that when the price of labor is $9.00,the quantity supplied is 200 workers.When they lower the wage to $8.50,175 workers are willing to work.
a.Calculate the price elasticity of supply for workers.
b.Over time,technology becomes more effective as a substitute for workers.What happens to the firm's demand for workers? Explain.

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