How does the wage compare to equilibrium wage

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An economy has the following cobb-douglas production function: Y=K1/3L2/3. The economy has 1000 units of capital and a laor force of 1000 workers.

a). Derive the equation describing labor demand in this economy as a function of the real wage and capital stock.

b) If the real wage can adjust to equilibrate labor supply and labor demand, what's the real wage. At this equilibrium what are output,employment, and the total wage of workers??

c) If congress passes a law requiring firms to pay workers a real wage of 1 unit of output. How does this wage compare to equilibrium wage?

d)congress cannot dictate ow many workers firms hire at the mandated wage.given this fact, what are the effects of this law? What happens to employment, output, and total income of workers?

e)will congress succeed in its goal of helping the working class?explain.

Reference no: EM13234740

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