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2. Labor supply function: N = 1,000 + 12 (W/P) Labor demand function: N = 2,000...

2. Labor supply function: N = 1,000 + 12 (W/P) Labor demand function: N = 2,000 – 8 (W/P) Production function: ? = 100√? According equations above, find the equilibrium level of employment (N*), real wage (W/P)*, and the equilibrium level of output (Y*)for the economy.

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Answer #1

At equilibrium labor demand - Laber supply Tooo + 12 (w) - 2000 - 8 (6) 20(W) = love - N*= 1000 t 12 (so) = 1600 Y* = 100 516

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