uppose that the marginal product of labor is

MPN = 200 - 0.25N

where N is aggregate employment. The aggregate quantity of labor supplied is 100 + 6w, where w is the real wage.

Suppose that the government imposes a minimum wage of 80.

a) (3 points) What is the level of employment? Answer

b) (3 points) What is the level of unemployment? Answer

Now suppose that the marginal product of labor increases to

MPN = 250 - 0.25N

while the minimum wage of 80 is still effective.

c) (3 points) What is the new level of employment? Answer

d) (3 points) What is the new level of unemployment?