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

question 58

Essay

Suppose the economy's production function is Y = A(300N - N²).The marginal product of labor is MPN = A(300 - 2N).Suppose that A = 10.The supply of labor 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:

State Constitution

The fundamental legal document that establishes the structure, functions, and limits of a state government within the United States.

U.S. Constitution

The foundational document of the United States, establishing the framework of the federal government and the rights of citizens.

Uniform State Laws

Laws enacted to provide consistency across states by promoting similar legal statutes in various jurisdictions.

Uniform Commercial Code

A comprehensive set of laws guiding commercial transactions in the United States, intended to harmonize laws across the states.