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Suppose the marginal product of labor is MPN = 200 - 0.5N where N is aggregate employment. The aggregate quantity of labor supplied is 300 + 8w, where w is the real wage. What is the equilibrium quantity of employment?

Respuesta :

eooyibo123

Answer:

Equillibrum quantity of employment= 380

Explanation:

At equillibrum real wage (w) is equal to marginal product of labour (MPN)

MPN= 200-0.5N

Aggregate supply= 300+8w

At equilibrium w= MPN

At equillibrum Aggregate demand (N)= Aggregate Supply

w= 200-0.5N

w= 200-0.5(300+8w)

w= 200-150-4w

4w+w= 50

5w= 50

w= 10

Substitute value of w in w= 200-0.5N

10= 200-0.5N

0.5N= 200-10

0.5N= 190

N= 190/0.5= 380

funmilaciousfunmie78

Answer:

10

Explanation:

The margin product of labor (MPN) = 200 - 0.5N

Aggregate quantity of labor supplied, N = 300 + 8w

Note: In labor market equilibrium, marginal product of labor is equivalent to real wage(w),

Thus real wage (w) can be calculated as:

w = 200 - 0.5N

w= 200 - 0.5 (300+8w)

w= 200 - 150-4w

Collecting of like terms:

w + 4w = 200 - 150

5w = 50

w = 50/5

w = 10

Thus, the required equilibrium real wage (w)  in the market= 10

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