Describe what happens after the technological change

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Reference no: EM13147992

Consider the Lee-Malthus model as presented in lecture with the following modification: Suppose now that the birth schedule is not a concave function of wages but rather a convex function of wages. Furthermore, assume that the birth and death schedules meet at an equilibrium point (w*), but that at wages greater than w*, b(w) < d(w). Draw and label the diagram, and be sure to label the curves and the axis in the diagram(s). Label the equilibrium wage as w* and the equilibrium population as p*. Now suppose that there is technological change (an increase in the marginal productivity of labor). Draw this change in the diagram. Describe, in words, what happens after the technological change. What happens to the wage in the long run? What happens to the population size in the long run? Does the Iron Law of Wages (where Malthus asserted that technological change would not improve human living standards) hold in this case? Why or why not?

Reference no: EM13147992

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