Calculate the uncompensated elasticities of labour supply

Reference no: EM132199036

Question: The wage rate rises to $25/hour and she decides to work 41.5 hours a week. At $20/hour, if she worked 40 hours a week at the new relative prices she would have been indifferent to her original work decision. Calculate the income & substitution effects associated with the wage change. Calculate the compensated (substitution) & uncompensated (total) elasticities of labour supply implied by her response to the wage increase.

Reference no: EM132199036

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