Consider an economy in which the marginal product of labor MPN is: MPN = 500-3N, where N is the amount of labor used. Th

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Consider An Economy In Which The Marginal Product Of Labor Mpn Is Mpn 500 3n Where N Is The Amount Of Labor Used Th 1 (41.63 KiB) Viewed 27 times

Consider an economy in which the marginal product of labor MPN is: MPN = 500-3N, where N is the amount of labor used. The amount of labor supplied, NS, is given by: NS = 24 + 12w + 4T, where w is the real wage and T is a lump-sum tax levied Suppose that T = 32. individuals. The equilibrium value of employment is (Round your answer to two decimal places.) The equilibrium value of the real wage is S. (Round your answer to two decimal places.) Suppose in this situation, the government passes minimum-wage legislation that requires firms to pay a real wage greater than or equal to $1.69. Which of the following best explains the effect on the labor market? OA. The wage rises to $1.69, the quantity of labor demanded increases, and employment increases. OB. The increase in the wage rate will cause the supply of labor to increase, and thus employment will increase. OC. The minimum wage is below the equilibrium wage, so there is no effect on the labor market. OD. The wage rises to $1.69, the quantity of labor demanded decreases, and there is now unemployment. O E. The wage will rise to more than $1.69 due to the resulting shortage of labor and there will be no unemployment.