HW3_Online

# HW3_Online - This is part of Homework 3 It is worth 5 of...

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This is part of Homework 3. It is worth 5% of the homework and is due on Wednesday before class. You may do this as many times as you wish. Only your HIGHEST score will be counted. This is a simple version of a labor demand question. The idea is to calculate the amount of labor that will be hired in the economy, then to calculate the level of output in the economy. Consider the production function: Y=A(20N-.5N^2). Note that this function is increasing at a decreasing rate. Consider the marginal product of labor function: MPN=A(20-N). Note that this function is positive and decreasing. 1. Assume that A=5. Let nominal wage (W) be \$200 and price (P) be \$10. What is real wage?
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