In the Cobweb model of labor market equilibrium (Figure 4-19 ), the adjustments in employment can be small with adjustment being fast, or the adjustments in employment can be large with adjustment being slow. The result that comes about depends on the elasticity of labor supply. Which result (small and fast versus large and slow) is associated with a very inelastic labor supply? Which result is associated with elastic labor supply? What is the economic intuition behind this result?

data from figure 4-19

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Dollars E D D Employment