Suppose the marginal product of labor in the economy is given by MPN = 0.01(3,000 - N), while the supply of labor is 500
Posted: Wed Jul 06, 2022 6:18 pm
Suppose the marginal product of labor in the economy is givenby MPN = 0.01(3,000 - N), whilethe supply of labor is 500 + 550w.
(a) Find the market-clearing real wage rate and level ofemployment.
(b) What happens to the wage rate and employment if wealthrises, reducing the supply of labor to 200 + 400w?
(c) What happens to the wage rate and employment if after wealthhas risen as in part (b), there is a productivity shock thatincreases the marginal product of labor to MPN =0.03(3,000 - N)?
(d) What happens if the government imposes a minimum wage of 60?Is there involuntary unemployment?
(a) Find the market-clearing real wage rate and level ofemployment.
(b) What happens to the wage rate and employment if wealthrises, reducing the supply of labor to 200 + 400w?
(c) What happens to the wage rate and employment if after wealthhas risen as in part (b), there is a productivity shock thatincreases the marginal product of labor to MPN =0.03(3,000 - N)?
(d) What happens if the government imposes a minimum wage of 60?Is there involuntary unemployment?