Consider the information in the file named HW2 - Production Datafor the Economy. The file shows a part of the marginal-productfunction for a firm. The firm hires more that 90 workers.Therefore, the file begins with the 91st worker to save space. Thefirst 90 workers are already producing a total of 10,530 units ofoutput. There are 100 such firms in the economy. All the firms areidentical (to make our calculations less cumbersome).

Next, assume that the total number of people who are willing andable to work is 10,000. Wages and prices are fully flexibledownwards and upwards. No frictional or structural unemploymentexist in the economy.

In this economy, the equilibrium real wage equals --------unitsand the equilibrium level of employment equals-------- persons.

If it is not too much trouble, could you also please verify thatthe potential GDP in this country is ---------units?

In this economy, workers receive a total of -------units of thereal GDP as their wages while the owners of capital receive theremaining ----------units.

Suppose that the government follows some lax immigrationpolicies and as a result 200 immigrant workers enter the country.Now we will have the following situations:

Real wage = -------units

Total real wage received by immigrant workers =--------units

The change in the share of native workers in real GDP =---------units (enter this with a negative sign for the decreaseand with no sign for the increase)

The change in the share of capitalists in real GDP =--------units enter this with a negative sign for the decrease andwith no sign for the increase)

Note: Use the formulas for geometric areas to calculate the lastthree numbers.

 

Note: The first 90 workers in this firm have already produced a total of 10,530 Labor 91 92 93 94 95 96 97 98 99 100 101 102 MPL 26 24 22 20 18 16 14 12 10 8 6 4