posted by Jon on .
Asher is a stay at home dad who provides math tutoring for extra cash. At a wage of $30 per hour, he is willing to tutor 5 hours per week. At $45 per hour, he is willing to tutor 6 hours per week. Using the midpoint method, the elasticity of Asher’s labor supply between the wages of $30 and $45 per hour is approximately ( .5, 1, 2.2, .45), which means that Asher’s supply of labor over this wage range is (elastic, unit elastic, inelastic).
Elasticity is (%change in Q)/(%change in P) Here the wage rate is P and output is hours. Here (%change in Q) mid-point method is 1/5.5 = 18.18%. Take it from here.