7. Initially California the 5thlargest economy in the world is in equilibrium with a xed supply of labor. (a) Draw the graphs for (i) output as a function of labor, (ii) the marginal product of labor as a function of labor and identify the equilibrium levels of output and the real wage. (b) California suffers an earthquake that decreases the capital stock by 20%. For tunately, the earthquake earlywarning (EEW) system of UC Berkeley, having been funded and deployed, prevents any loss of life or injury. On the graphs from Question (7a) above, add the curves and equilibrium conditions for the post earthquake situation. Use a different color and/or line type to distinguish these postearthquake curves from the preearthquake curves. Identify the equilibrium levels of output and the real wage. (c) Briey explain the pre and postearthquake economic conditions illustrated by your graphs. 4I recommend using the Excel version