Question
Labor Market and Production: Wage=100-N Wage=25+2N Y=A*K.5N.5 Goods Market: C=50+2/3(Y-T)-200r I=100-200r G=70 T=50 Asset Market: MS=245/P MD=1/2(Y)-100r a. Suppose that the current capital-labor ratio is
Labor Market and Production: Wage=100-N Wage=25+2N Y=A*K.5N.5
Goods Market: C=50+2/3(Y-T)-200r I=100-200r G=70 T=50
Asset Market: MS=245/P MD=1/2(Y)-100r
a. Suppose that the current capital-labor ratio is 1 (the amount of capital exactly equals the number of workers) and that the total factor productivity (technology) equals 20. What are the equilibrium wage, employment level, and the full employment level of output? Draw this all graphically and make sure to label the graph.
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Managerial Economics A Problem Solving Approach
Authors: Luke M. Froeb, Brian T. McCann
1st Edition
0324359810, 9780324359817
