Principles of Microeconomics / Unit 4 MIC 0329 short lesson, about 20 seconds
Elasticity of Labor Supply and of Saving
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The idea
Labor supply elasticity is the percentage change in hours offered over the percentage change in the wage: high for teenagers, low and sometimes negative for the highest paid.
In practice
Saving's response to the interest rate is measured the same way and is small.
Where people slip
A negative value is unit three's backward bend as a number; both estimates are attributed and vary by study.
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