CL5 ECO 3203 - b. If the real wage w is 5, how many workers...

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Classwork #5 1. The production function for a country is Y = 20 L 0.5 K 0.5 , where Y is output, L is labor, and K is the capital stock. Suppose K has a value of 81. Suppose labor supply is L s = 4 w 2 , where w is the real wage and L s is labor supply. a. Derive an equation for labor demand.
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Unformatted text preview: b. If the real wage w is 5, how many workers are hired? c. If the real wage is 5, how much unemployment is there? d. Find the equilibrium wage e. Illustrate your results on a labor supply / labor demand graph....
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