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(This is all one question): The supply curve for a job is given by w =...

(This is all one question):

The supply curve for a job is given by w = 10 + 5E. The demand curve for this job is given by w = 50 − 3E.

a. Calculate equilibrium wage and employment level.

b. Suppose that demand increases to w = 60 − 3E. Calculate the new equilibrium wage and employment level.

c. Suppose that demand increases to w = 60 − 3E. Assume the market is subject to cobwebs. Calculate the wage and employment level in each stage as the wage and employment levels adjust to the demand shock. (You can stop after 9 stages.)

d. In the Cobweb model of labor market equilibrium, the adjustments in employment can be small with adjustment being fast, or the adjustments in employment can be large with adjustment being slow. What is the primary factor that affects the size of the adjustment in employment? Demonstrate this by drawing diagrams (HINT: What determines size of % change in employment when wages increases?)

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