Homework Answers
a) At equilibrium,
Ld = Ls
50 - 4w = -20 + 3w
7w = 70
w = 70 / 7 = $10
L = 50 - 4w = 50 - 4(10) = 10
Thus, the equilibrium wage = $10
The equilibrium quantity of labor employed = 10
b) If wages are raised by 20%, the new wage = 10 * 1.20 = $12
At the wage rate of $12,
Ls = -20 + 3w = -20 + 3(12) = 16
Ld = 50 - 4w = 50 - 4(12) = 2
So, the unemployed after wage increase = 16 - 2 = 14
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Please show step by step on how the calculations are made: Thank you. I have uploaded...
Please show step by step on how the calculations are made: Thank
you.
I have uploaded 3 questions which is the normal number of
maximum questions answered in 1 post.
Question 1:
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Please show step by step on how the calculations are made: Thank
you.
I have uploaded 3 questions which is the normal number of
maximum questions answered in 1 post.
Question 1:
Question 2:
Question 3:
A firm's labor demand and labor supply equations are shown below. Labor demand equation: Ld = 50 – 4w Labor supply equation: Ls=-20 + 3w, where w is the wage per hour worked, Ld is the number of workers demanded by firms, and Ls...
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