Question

(g) Explain how to get the demand curve for labor. (h) Explain how to determine output in an economy with a labor market. (i) Explain how to find the stationary state in a Solow model. (j) Explain how the economy behaves out of the stationary state in a Solow model.

Answer 1

(g) It is found by multiplying the marginal product of labor by the price or output. firm will demand labor until the MRPL equals the wage rate. The demand curve for labor can be shifted by changes. in the productivity of labor.

70 d 6 to calculate a cocentoy's labor productivity you would divide the total output by the total no. of labor hours. For example- suppose the real Gop of an example is $ 10 trillion and the aggregate hours of labor in country is 300 b. us

0 The Solow Growth model is an Exogenous model of Economic growth that analysis changes in the level or output in an Economy oren time as a result of changes in the population growth rate... K* - lata) 14 ] o normal equa-

When this happens, we have Reached What is called the steady skate level of capital. The steady - shade is the key to understanding the solon model. ③ The sheady - state Economy is an Economy made up a constant stock of physical wealth and a constant population size . The team typically Refers to a national Economy but it can also be applied to a local Regional or global Economy