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homework 1sol - ECON 1110 Spring 2008 Assignment 1: Labor...

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ECON 1110 Spring 2008 Assignment 1: Labor markets 1. Exercise 1 in [AB] (Numerical problems of Chapter 3). Answer to a) : 5TH EDITION Year A % Increase in A 1960 12.981 1970 14.152 18.1% 1980 14.746 4.2% 1990 16.335 10.8% 2000 18.779 15% 6TH EDITION Year A % Increase in A 1960 12.484 1970 14.701 17.8% 1980 15.319 4.2% 1990 17.057 11.3% 2000 19.565 14.7% Answer to b): Calculate the marginal product of labor by seeing what happens to output when you add 1.0 to N; call this Y2, and the original level of output Y1. [A more precise method is to take the derivative of output with respect to N; dY/dN 0.7A(K/N).3. The result is the same (rounded).] 5TH EDITION Year MPN 1960 25 1970 32 1980 34 1990 39 2000 48 6TH EDITION Year MPN 1960 27 1970 33 1980 36 1990 42 2000 50
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2. (Minimum wage). Assume that the labor demand curve is given as: W P 10 0.1 N . Labor supply is inelastic to changes in the wage, so that households are willing to supply N 50 units of labor, no matter the wage (a) Compute the equilibrium real wage
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This note was uploaded on 04/15/2008 for the course AST 0035 taught by Professor Barbkucinski during the Fall '08 term at Pittsburgh.

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homework 1sol - ECON 1110 Spring 2008 Assignment 1: Labor...

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