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Suppose the Economy's Production Function Is Y = A(300N -

question 72

Essay

Suppose the economy's production function is Y = A(300N - N²).The marginal product of labour is MPN = A(300 - 2N).Suppose that A = 10.The supply of labour is NS = 0.05w + 0.005G.
a.If G is 26,000,what are the real wage,employment,and output?
b.If G rises to 26,400,what are the real wage,employment,and output?
c.If G falls to 25,600,what are the real wage,employment,and output?
d.In cases (b)and (c),what is the government purchases multiplier;that is,what is the change in output divided by the change in government purchases?


Definitions:

Legally Binding

an agreement or contract that is enforceable by law, obligating parties to fulfill their contractual duties.

Unconscionable

Actions or terms that are excessively unfair or oppressive and not guided by conscience.

Competing In Business

The act of engaging in efforts to win over customers, achieve superior market position, or attain higher sales in a particular marketplace against other businesses.

Illegal Contract

An agreement that is against the law or public policy and therefore unenforceable in a court of law.

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