If the wage rate increases from $12 to $13 and, as a result, the quantity demanded of labor decreases from 400 workers to 380 workers, then the absolute value of the elasticity of demand for labor is

Elasticity of demand measure the responsiveness of demand against the change in price of the product. It shows how much the demand changes if the price of the particular product or item is changed.

Change in Demand = ( D2 - D1 ) / D1

Change in Demand = ( 380 - 400 ) / 380

Change in Demand = -20 / 380

Change in Demand = -0.0526

Change in price = ( P2 - P1 ) / P1

Change in price = ( $13 - $12 ) / $12

Change in price = $1 / $12

Change in price = 0.0833

Formula for Elasticity in of demand is

Elasticity of Demand = Change in Demand / Change in price

Elasticity of Demand = -0.0526 / 0.0833

Elasticity of Demand = -0.6315 = -0.6

ogbe2k3 ogbe2k3 · Answer 2 · 2020-04-07T05:02:07+02:00

Answer:

-0.6 is The absolute value the elasticity of demand for labor.

Explanation:

The demand measure of Elasticity is refereed to the positive demand against the change in the product price. It shows how much the demand changes if the price of the particular item or product is altered .

From the question given, we recall the following,

The Change in Demand = ( D2 - D1 ) / D1

Change in Demand = ( 380 - 400 ) / 380

Change in Demand = -20 / 380

The change in demand becomes,

Change in Demand = -0.0526

The Change in price = ( P2 - P1 ) / P1

Change in price = ( $13 - $12 ) / $12

Change in price = $1 / $12

Change in price = 0.0833

The Formula for Elasticity in of demand is defined as,

The Elasticity of Demand = Change in Demand / Change in price

Elasticity of Demand = -0.0526 / 0.0833

Therefore,

Elasticity of Demand = -0.6315 = -0.6