Pset3 - 5. Suppose in a labour market that labour demand, L...

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Ec 115 - Problem Set 3. In this problem set you will need to use the following facts, that (i) the solution to ax 2 + bx + c = 0 is given by x = b ± p b 2 4 ac 2 a ; (ii) that a function y = ax 2 + bx + c is (a) a maximum at x = b= 2 a if a < 0; (b) a minimum at x = b= 2 a if a > 0 : 1. Consider the function y = x 2 4 x + 5 : For what values of x is y = 0; i.e. solve for x where x 2 4 x + 5 = 0 : Draw the function y = x 2 4 x + 5 on a graph. 2. Repeat question 1 but for the function y = 2 x 2 + 6 x + 5 : 3. Using substitution and elimination, solve for ( x; y ) given by the pair of equations: y = 1 + x 2 y = 2 3 2 x: Depict your answer on a graph. 4. Using substitution and elimination, solve for ( x; y ) given by the pair of equations: y x 2 = 0 x 4 y = 0 : Depict your answer on a graph.
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Unformatted text preview: 5. Suppose in a labour market that labour demand, L d ; is given by L d = 3200 &amp; 80 w where w is the market wage. Labour supply, L s ; is non-linear with L s = 100 w &amp; w 2 : Find the market wage w &amp; and level of employment L &amp; where labour demand equals labour supply. Draw a graph of this market equilibrium (you should really put w on the &amp;y-axis±but you will ²nd it easier if you instead put L on the &amp;y-axis± then ³ip). Can you interpret a backward bending labour supply curve? 1...
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This note was uploaded on 12/31/2011 for the course ECON MR 102 taught by Professor Huyduong during the Winter '11 term at RMIT Vietnam.

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