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

Question

Quizplus · Accepted Answer

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.

Related to the Economics in Practice on P