the percentage change in wages—will reflect the shape of the labor supply curve. Specifically:

The wage elasticity of labor supply for teenage workers is generally fairly elastic: that is, a certain percentage

change in wages will lead to a larger percentage change in the quantity of hours worked. Conversely, the wage

elasticity of labor supply for adult workers in their thirties and forties is fairly inelastic. When wages move up

or down by a certain percentage amount, the quantity of hours that adults in their prime earning years are

willing to supply changes but by a lesser percentage amount.

In markets for financial capital, the elasticity of savings—that is, the percentage change in the quantity of

savings divided by the percentage change in interest rates—will describe the shape of the supply curve for

financial capital. That is:

Sometimes laws are proposed that seek to increase the quantity of savings by offering tax breaks so that the
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