12. calculating the price elasticity of supply. felix is a university student who lives in edmonton and does…

12. calculating the price elasticity of supply. felix is a university student who lives in edmonton and does some consulting work for extra cash. at a wage of $30 per hour, he is willing to work 6 hours per week. at $50 per hour, he is willing to work 16 hours per week. using the midpoint method, the elasticity of felixs labour supply between the wages of $30 and $50 per hour is approximately _, which means that felixs supply of labour over this wage range is _.

12. calculating the price elasticity of supply. felix is a university student who lives in edmonton and does some consulting work for extra cash. at a wage of $30 per hour, he is willing to work 6 hours per week. at $50 per hour, he is willing to work 16 hours per week. using the midpoint method, the elasticity of felixs labour supply between the wages of $30 and $50 per hour is approximately _, which means that felixs supply of labour over this wage range is _.

Answer

Explanation:

Step1: Identify the mid - point formula

The mid - point formula for price elasticity of supply is $E_s=\frac{%\Delta Q_s}{%\Delta P}=\frac{\frac{Q_2 - Q_1}{\frac{Q_2+Q_1}{2}}}{\frac{P_2 - P_1}{\frac{P_2+P_1}{2}}}$, where $Q_1$ and $Q_2$ are the quantities supplied and $P_1$ and $P_2$ are the prices.

Step2: Define the values

Let $P_1 = 30$, $P_2=50$, $Q_1 = 6$, $Q_2 = 16$.

Step3: Calculate the percentage change in quantity supplied

$%\Delta Q_s=\frac{Q_2 - Q_1}{\frac{Q_2+Q_1}{2}}\times100=\frac{16 - 6}{\frac{16 + 6}{2}}\times100=\frac{10}{\frac{22}{2}}\times100=\frac{10}{11}\times100\approx90.91$

Step4: Calculate the percentage change in price

$%\Delta P=\frac{P_2 - P_1}{\frac{P_2+P_1}{2}}\times100=\frac{50 - 30}{\frac{50+30}{2}}\times100=\frac{20}{\frac{80}{2}}\times100=\frac{20}{40}\times100 = 50$

Step5: Calculate the price elasticity of supply

$E_s=\frac{%\Delta Q_s}{%\Delta P}=\frac{\frac{10}{\frac{22}{2}}}{\frac{20}{\frac{80}{2}}}=\frac{10/11}{20/40}=\frac{10}{11}\times\frac{40}{20}=\frac{20}{11}\approx1.82$

Answer:

$1.82$