Assume that the coefficient of elasticity of product demand is 0.5 in industry A and is 3.2 in industry B. Other things equal, labor demand will be:
A. more elastic in industry A than in B.
B. relatively elastic in both industries A and B.
C. more elastic in industry B than in A.
D. relatively inelastic in both industries A and B.
Answer: C
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Because of differences in culture and language, it is not surprising that:
A) Eurozone nations are opposed in theory to the currency union but accept it in practice. B) Eurozone nations tend to be more homogeneous than states in the United States. C) demand shocks tend to be symmetric, whereas supply shocks are asymmetric. D) the year-to-year flow of people between states in the United States is larger than the same flow between member nations in the Eurozone.
If Herbert, the hair stylist, raises the price of his cuts from $13 to $15 and finds the number of cuts falls from 300 to 260, then the demand for Herbert's cuts in this range is:
a. price inelastic. b. price elastic. c. unit elastic. d. cross elastic. e. income inelastic.