The more freedom people are given to choose the date of their retirement,the
A) more elastic is the supply of labor.
B) less elastic is the supply of labor.
C) steeper is the labor supply curve.
D) smaller is the decrease in employment that will result from a tax on labor.

Question

Quizplus · Accepted Answer

When people are given the freedom to choose their retirement date, the supply of labor becomes more elastic because individuals can adjust their labor supply to their preferences and needs. With more options, people are more likely to vary the number of years they work, the number of hours they work each week, or the type of work they do. As a result, the labor supply curve becomes flatter, indicating that a small change in wages or working conditions can lead to a larger change in the quantity of labor supplied. A tax on labor would also be less likely to discourage employment because individuals can adjust their labor supply in response to changes in the net wage, including tax effects.

The More Freedom People Are Given to Choose the Date