Macro Game - Simple Macroeconomy Game Discussion...

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Simple Macroeconomy Game Discussion
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alculating Real Wage Calculating Real Wage eal wage = Wage / Price Real wage = Wage / Price
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ne Firm’s Problem One Firm s Problem Marginal Product of Labor: 1 st worker: 6 7 8 2 nd worker: 5 3 rd worker: 4 4 th worker: 3 th orker: 2 ge (W/P) 5 6 5 worker: 2 6 th worker: 1 7 th worker: 1 etc. Real Wa 3 4 1 2 Demand for labor Labor 12 3 45678
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o Firms Two Firms 7 8 age (W/P) 5 6 Real W 3 4 1 2 Demand for labor Labor 2 4 6 8 10 12 14 16
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ne Worker’s Problem One Worker s Problem Supply of Labor Marginal Utility of Leisure: 1 st unit: 3 nd nit: 2 7 8 2 unit: 2 3 rd unit: 1 ge (W/P) 5 6 Real Wa 3 4 1 2 Labor 12 3 45678
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ur Workers Four Workers Supply of Labor P) 7 8 Wage (W/ P 5 6 Real W 2 3 4 1 Labor 12 3 45678 9 1 01 11 2
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ll Together Now… All Together Now… Supply of Labor P) 7 8 Wage (W/ P 5 6 Real W 2 3 4 1 Demand for labor Labor 12 3 45678 9 1 01 11 2
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Efficiency If you are a benevolent social planner, and you are going to impose your (benevolent) will on y p, y gg p y () the game participants, how many units of labor do you require to be exchanged? A
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This note was uploaded on 09/15/2009 for the course ECON 304 taught by Professor Stone,mistyriano,alejandro during the Fall '07 term at Penn State.

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Macro Game - Simple Macroeconomy Game Discussion...

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