Suppose the following equations characterize supply and demand in the labor market model:
labor supply: L^s = 2 × w + 30
labor demand: L^d = 60 − w
Equilibrium occurs at an employment level L* and a wage w*, so that the labor market clears. That is, supply is equal to demand: L^s = L^d.
(a) What are the endogenous variables in the labor market model?
(b) Solve for the equilibrium values of these endogenous variables.