The marginal product of labor in the economy

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Suppose the marginal product of labor in the economy is given by MPN = 0.002(16,000 - N), while the supplyof labor is 1000 + 1000w.(a) Find the market-clearing real wage rate and level of employment.(b) What happens to the wage rate and employment if wealth rises, reducing the supply of labor to 500 +1000w?(c) What happens to the wage rate and employment if after wealth has risen as in part (b), there is aproductivity shock that increases the marginal product of labor to MPN = 0.0025(16,000 - N)?

Reference no: EM13841420

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