Labor Supply and Elasticity

This lecture delves into the concept of labor supply and elasticity, using a temporary employment agency as an example. The instructor explains how changes in hourly wages affect the number of hours supplied by students for agricultural work. Through real data analysis, the lecture covers the calculation of elasticity of supply and its implications. Various scenarios are explored, such as the impact of a carbon tax on heating oil demand and the elasticity of cigarette demand. The session concludes with a detailed exercise on determining the wage increase needed to attract a specific percentage increase in student labor hours.