Asked by Tesha Cherry on May 01, 2024
Verified
Related to the Economics in Practice on p. 105: Researchers found that a ten percent reduction in the tax rate induced a twenty percent increase in migration in Europe. This indicates that labor migration in Europe is
A) elastic.
B) inelastic.
C) unit elastic.
D) perfectly inelastic
Tax Rate
The percentage at which an individual or corporation is taxed.
Labor Migration
The movement of people from one area to another for the purpose of employment.
Europe
A continent located entirely in the Northern Hemisphere and mostly in the Eastern Hemisphere, comprising various countries with diverse cultures and economies.
- Examine the impact of elasticity on labor supply and demand, including the effects of wage changes.
Verified Answer
ZK
Zybrea KnightMay 04, 2024
Final Answer :
A
Explanation :
The twenty percent increase in migration in response to a ten percent reduction in the tax rate indicates that labor migration is sensitive to changes in the tax rate, which is the definition of elasticity. Therefore, labor migration in Europe is elastic.
Learning Objectives
- Examine the impact of elasticity on labor supply and demand, including the effects of wage changes.