Assignment: Elasticity and Labor Market Equilibrium-MT455
Assignment: Elasticity and Labor Market Equilibrium
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In this Assignment, you will elaborate price elasticity of demand and supply in the short run and long run. You will evaluate factors that change equilibrium wage rate and employment level. Moreover, you will calculate total revenue product and marginal revenue product, and compare them with total cost and marginal cost in order to figure out optimal quantity of labor that should be hired to maximize profit.
Instructions: Answer all of the following questions. You are required to follow proper APA format. Read the Criteria section below for more information before you begin this Assignment.
1. Is the price elasticity of demand for gasoline more elastic over a shorter or a longer period of time? Explain.
Is the price elasticity of supply, in general, more elastic over a shorter or a longer period of time? Explain.
3. Why is the supply curve for labor usually upward sloping? Explain.
In the graph below, assume that the...