What are the resulting values of employment

Assignment Help Econometrics

Reference no: EM13199100

Consider an economy in which the marginal labor MPN is MPN= 309-2N, where N is the amount of labour used. The amount of labor supplied, NS, is given by NS=22+12w+2T, where w is the real wage and T is a lump-sump tax levied on individuals.
a. Use the concepts of income effect and substitution effect to explain why an increase in lump-sum taxes will increase the amount of labor supplied.
b. Supposed that T=35. What are the equilibrium values of employment and the real
wage?
c. With T remaining equal to 35, the government passes minimum-wage legislation that requires firms to pay a real wage greater than or equal to 7.

d. What are the resulting values of employment and the real wage.

Reference no: EM13199100

Questions Cloud

Native americans and the federal government : summary of one current (within past 10 years) issue between Native Americans and the federal government. Identify the specific legislation (law or bill) you think is linked to the issue, and explain why you think there is a connection.

How will change in price level affect the demand for money : When the economy makes the transition from its short-run equilibrium to its long-run equilibrium, what will happen to the price level. How will this change in the price level affect the demand for money and the equilibrium interest rate.

Government expenditure in increasing gdp : An increaseing governemtn expenditure in increasing GDP when it is financed by rasing taxes or slling government bonds to the general public or else.

Design buildings as an organic and integral part of nature : Which architect tried to design buildings as an organic and integral part of nature?

What are the resulting values of employment : Consider an economy in which the marginal labor MPN is MPN= 309-2N, where N is the amount of labour used. The amount of labor supplied, NS, is given by NS=22+12w+2T, where w is the real wage and T is a lump-sump tax levied on individuals.

Efficient production-manufacturers offer : To enable manufacturers to smooth out manufacturing peaks and troughs and thereby contribute to more efficient production, manufacturers offer

Discuss its countries-religions and economy : Discuss its countries, religions, economy, educational systems, cultures, ethnicities, languages, histories, governments and politics.

Compare this result with the mpn for an increase in labor : graph the relationship between output and labor, holding capital constant at its current value. Find the MPN for an increase of labor from 100 to 110. Compare this result with the MPN for an increase in labor from 110 to 120. Does the marginal pro..

Explain steps take to evaluate arguments : What are some examples of errors that affect truth and validity? Summarize the steps you would take to evaluate arguments

User Account

All Pages