Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose the wage for textile manufacturing workers rises from $9 to $11 per hour, and employment of textile manufacturing workers falls from 680 to 500

Suppose the wage for textile manufacturing workers rises from $9 to $11 per hour, and employment of textile manufacturing workers falls from 680 to 500 hours per week.

The own-wage elasticity of demand for airline pilots is 0.4.

If the difference in elasticity between these two occupations is explained by labor's share of total costs, which of the following describes the resulting changes in demand for each category of labor?

A. A larger scale effect in the demand for textile manufacturing labor than for airline pilots.

B. A larger scale effect in the demand for airline pilots than for textile manufacturing labor.

C. A larger substitution effect in the demand for textile manufacturing labor than for airline pilots.

D. A larger substitution effect in the demand for airline pilots than for textile manufacturing labor.

Which of the following offers a potential explanation for the difference in own-wage elasticity for these two occupations?

A. Capital is not easily substituted for either textile manufacturing labor or airline pilots.

B. Capital is easily substituted for both textile manufacturing labor and airline pilots.

C. Capital is more easily substituted for textile manufacturing labor than for airline pilots.

D. Capital is more easily substituted for airline pilots than for textile manufacturing labor.

If the difference in elasticity between these two occupations is explained by the substitutability of each labor input, which of the following describes the resulting changes in demand for each category of labor?

A. A larger scale effect in the demand for airline pilots than for textile manufacturing labor.

B. A larger substitution effect in the demand for airline pilots than for textile manufacturing labor.

C. A larger scale effect in the demand for textile manufacturing labor than for airline pilots.

D. A larger substitution effect in the demand for textile manufacturing labor than for airline pilots.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Sociology Of Economic Innovation

Authors: Francesco Ramella

1st Edition

1317621344, 9781317621348

More Books

Students also viewed these Economics questions

Question

What do you think the natural cause of your problem is?

Answered: 1 week ago

Question

Define line and staff authority

Answered: 1 week ago

Question

Define the process of communication

Answered: 1 week ago

Question

Explain the importance of effective communication

Answered: 1 week ago

Question

* What is the importance of soil testing in civil engineering?

Answered: 1 week ago

Question

Behaviour: What am I doing?

Answered: 1 week ago