Unformatted text preview: Explain and graphically analyse the effects of this change on employment and output in the classical model. 2. Suppose the production function is Cobb Douglas, such that y=K 0.4 N 0.6 . Calculate the marginal product of labour (MPN). 3. What were the two key tenets of mercantilism? What were the classical economists’ reasons for opposing them? What did the classical economists propose? 4. Suppose the real wage (W/P) doubles for some exogenous reason. Demonstrate the effect on the labour market. What happens to unemployment and output? 5. What factors determine output and employment in the classical model? 6. What factors affect neither output nor employment in the classical model? 7. Explain Say’s law....
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This note was uploaded on 03/10/2012 for the course ECON 1110 taught by Professor Tedloch-temzelides during the Spring '08 term at Pittsburgh.
- Spring '08