11. Suppose that the production function is Y=K^(0.5) N^(0.5). With thisproduction function the marginal product of labor is MPN=0.5K^(0.5) N^(-0.5).The capital stock is K=100. The labor supply curve is NS=100(w^2), where w isthe real wage and NS denotes the quantity of labor supplied. Compute theequilibrium level of employment (N).12. Consider Question 11 again. Compute the level of full-employment output(Y). Approximate your answer to the next integer.13. Consider Question # 11 again. Due to a temporary reduction in immigration,the economy's labor supply curve changes to NS=90(w^2). A policy makersuggests that in order to increase full-employment output in response to thereduction in immigration the government might temporarily subsidize the firm'slabor cost by paying a fractions of the wage it pays to a worker. That is, if thereal wage received by a worker is w, the firm only pays a portion (1-s)w with theremaining sw coming from the government. Compute the subsidy s that wouldmake the level of full employment (N) in the economy with reduced immigrationequal to the level of full employment of the economy in Question # 11. Enteryour answer in percent with one decimal and without the % symbol.

Unemployment can be defined in several ways, each capturing different aspects of the concept. Here…

11. Suppose that the production function is Y=K^(0.5) N^(0.5). With this production function the marginal product of labor is MPN=0.5K^(0.5) N^(-0.5). The capital stock is K-100. The labor supply curve is NS=100(w^2), where w is the real wage and NS denotes the quantity of labor supplied. Compute the equilibrium level of employment (N). 12. Consider Question 11 again. Compute the level of full-employment output (Y). Approximate your answer to the next integer.

11. Suppose that the production function is Y=K^(0.5) N^(0.5). With this production function the marginal product of labor is MPN=0.5K^(0.5) N^(-0.5). The capital stock is K-100. The labor supply curve is NS=100(w^2), where w is the real wage and NS denotes the quantity of labor supplied. Compute the equilibrium level of employment (N). 12. Consider Question 11 again. Compute the level of full-employment output (Y). Approximate your answer to the next integer.

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: The Markets For The Factor Of Production

Section: Chapter Questions

Problem 9PA

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