Changes

:If the good produced by the firm is ''highly'' price elastic, then a small increase in price causes a large decrease in demand for the good, and thus a large decrease in output by the firm.  But this large decrease in output means there must be a large decrease in the number of workers needed to produce that output.  Thus the demand for labor is highly elastic when there is high price elasticity of demand for the product of that labor.  Notice how in economics it helps to consider the extreme case to get the right answer.   

:If the good produced by the firm is ''highly'' price elastic, then a small increase in price causes a large decrease in demand for the good, and thus a large decrease in output by the firm.  But this large decrease in output means there must be a large decrease in the number of workers needed to produce that output.  Thus the demand for labor is highly elastic when there is high price elasticity of demand for the product of that labor.  Notice how in economics it helps to consider the extreme case to get the right answer.   

4.  Do you think that government policy should give high priority to the Lorenz curve?  Explain the issue that a Lorenz curve addresses, and whether you think that should be a high priority of government economic policy.

4.  Do you think that government policy should give high priority to the Lorenz curve?  Explain the issue that a Lorenz curve addresses, and whether you think that should be a high priority of government economic policy.