Problem
1. Suppose that a new invention halved the cost of making automobiles. Would total employment fall if today's demand for automobiles were inelastic? If it were elastic? Explain your answer. Don't forget the secondary effects and the role of time.
2. What are the major determinants of the elasticity of demand for a specific category (for example, physicists, craftsmen, etc.) of labor? Explain. Be specific. How does time affect the elasticity of demand for labor?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.