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Part A:
Question 1: What is the price elasticity of demand? Can you explain it in your own words?
Question 2: What is the price elasticity of supply? Can you explain it in your own words?
Question 3: What is the relationship between price elasticity and position on the demand curve? For example, as you move up the demand curve to higher prices and lower quantities, what happens to the measured elasticity? How would you explain that?
Part B: Assume that the supply of low-skilled workers is fairly elastic, but the employers' demand for such workers is fairly inelastic. If the policy goal is to expand employment for low-skilled workers, is it better to focus on policy tools to shift the supply of unskilled labor or on tools to shift the demand for unskilled labor?
Question: What if the policy goal is to raise wages for this group? Explain your answers with supply and demand diagrams. Make sure to properly cite and reference your academic or peer-reviewed sources (minimum 2).
APA 7th edition
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