Labor demand and supply of a market are given by w = 32 - 5Ed and w = 4 + 2Es. Please show work for each part. a.What is the equilibrium employment in this market? [a] b.What is the equilibrium wage in this market? [b]
Question: 1
Labor demand and supply of a market are given by w = 32 - 5Ed and w = 4 + 2Es.
Please show work for each part.
a.What is the equilibrium employment in this market? [a]
b.What is the equilibrium wage in this market? [b]
Question: 2
The marketplace is currently in equilibrium as indicated by the tangency condition shown below. Assume capital and labor are substitutes. Suppose technological improvements increase the productivity of capital but have no effect on the productivity of labor. In terms of its use of capital and labor what would you expect firms to do to re-establish equilibrium?
(MPe/W) = (MPk/r)
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