Calculate equilibrium levels of the real wage and employment

Assignment Help Econometrics
Reference no: EM13222226

The production function is Y=9K^.5N^.5.
MPN =4.5K^.5N^-.5
Capital Stock is K=25
Labor Supply curve si NS = 100[(1-t)w]^2 where w is real wage rate, t is tax rate on labor income

Question:
1. Assume tax rate on labor income t=.6. Find the equation of the labor demand curve. Calculate equilibrium levels of the real wage and employment, the level of full employment output, and the total after tax wage income of workers.

2. Suppose that minimum wage of w=2 is imposed. If t=0, what are the resulting values of employment and the real wage?

Reference no: EM13222226

Questions Cloud

Establish the foundational areas for growth potential : You may use the format you choose (Word, Excel, Visio, Project). Please support your work through use of a minimum of 3 sources using APA format. The paper should be 3-5 pages.
Explain what is the corporate bond rate : Consider the following four debt securities, which are identical in every characteristic except as noted: W: A corporate bond rated AAA X: A corporate bond rate BBB Y: A corporate bond rated AAA with a shorter time to maturity than bonds W and X Z..
Explain solution is evaporated to half its volume : A solution that is known to contain come of the soluble ions from group 1 and no other cations or inteferring substances, 12 drops of 6M hydrochloric acid is added and no precipoiate forms.To clear solution is evaporated to half its volume and 12 ..
Which dispatching rule would you select : Complete the table below. (Show your supporting calculations)
Calculate equilibrium levels of the real wage and employment : Assume tax rate on labor income t=.6. Find the equation of the labor demand curve. Calculate equilibrium levels of the real wage and employment, the level of full employment output, and the total after tax wage income of workers.
How many kilograms should they place in this warehouse : How many kilograms should they place in this warehouse before the 2011 growing season?
Analyze the effects of the two separate policies : The US government has two different methods to deal with illegal drug use. First, the government has tried a "war on drugs", with the idea of keeping illegal drugs out of the country. Second, the "just say no" campaign has been used to make indivi..
Shift of american health insurance policies : The Shift of American Health Insurance Policies - How the Changes Affect Our Economy, What health program is better financially and morally?
Explain hydrochloric acid is added and no precipoiate forms : To a solution that is known to contain come of the soluble ions from group 1 and no other cations or inteferring substances, 12 drops of 6M hydrochloric acid is added and no precipoiate forms.To clear solution is evaporated to half its volume and ..

Reviews

Write a Review

Econometrics Questions & Answers

  What is the expected return on the equity

Company A just paid a $3.00 dividend per share. The dividend is expected to grow at a 4% rate indefinitely. The beta of the stock of Company A is 1.5. The market risk premium is 8% and the risk-free rate is 3%. (a) What is the expected return on t..

  Find the annual operational cost of the system

A CNC machine was purchased for $120,000 and has a five-year depreciable life. The shipping and handling cost were $15,000. The annual operational cost of the system is $10,000. The estimated salvage of the machine is $20,000 at the end of five ye..

  Determine the marginal revenue product function

Consider the following short-run production function ( where L =variable input, Q=output): Q=10L - 0.5 L2 Suppose that output can be sold for $10 per unit. Also assume that the firm can obtain as much of the variable input (L) as it needs at $20 p..

  Calculate the profit by charging the optimal block price

Suppose you are the marketing manager for the Fruit of the Loom. An individuals' inverse demand for Fruit of the Loom women's underwear is estimated to be P = 25 - 3Q (in cents). If cost to Fruit of the Loom to producing women's underwear is C(Q) ..

  Find the profit maximizing output and price

Consider a demand function x = 100 - p where x is output and p is price. A monopolist has cost C(x) = (1/3) x^3 - 7 x^2 +111x +50 Find the profit maximizing output (and price) such that x 0. Check to see if you have a local max or min and also chec..

  Explain how should the input combination be adjusted

Hernandez Corp. uses two variable inputs, X and Y, to produce its final product, canoes. Its engineering department has estimated the marginal product functions for inputs X and Y as follows: MPx = Y/X MPy = 4 X/Y Where X and Y denote.

  What combinations of income and consumption for a student

Real Disposable Income Planned Real Consumption 0 3,000 2,000 4,400 4,000 5,800 6,000 7,200 8,000 8,600 10,000 10,000 12,000 11,400 14,000 12,800 Refer to Table 12.1. The table gives the combinations of income and consumption.

  Which of your current costs are implicit

Suppose you own a restaurant that serves only dinners. You are trying to decide whether or not or rent out your dinning room and kitchen during mornings to another firm, the Breakfast Club Inc., that will serve only breakfast.

  What amount should you bid to maximize the probability

Suppose we are interested in bidding on a piece of land and we know one other bidder is interested.1 The seller announced that the highest bid in excess of $10,000 will be accepted. Assume that the competitor's bid x is a random variable that is u..

  Determine the real interest rate for years 1978 through 1982

determine the real interest rate for the years 1978 through 1982 assuming that people expect the rate of inflation to be the average rate of inflation in the two previous years. Year: 1977 1978 1979 1980 1981 1982 Nominal interest rate: 5.6% 7.6% ..

  Calculate the rate of inflation

For the consumer price index (CPI) values shown, calculate the rate of inflation in each year from 1930 to 1933. Year: 1929 1930 1931 1932 1933 CPI: 51.3 50.0 45.6 40.9 38.8

  Did the labor productivity ratio increase or decrease

The ABC Company has a large order for special uniforms to be used in an urgent operation. Working the normal two shifts of 40 hours each per week, the ABC production process usually produces 2, 500 uniforms per week at a standard cost of $120 each..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd