a) Write down the log labor demand equation

. b) Find the value of wage w and employment L that characterizes the equilibrium. c) Assume that s = 1 and d = 2. How much does employment grows when A increases by 10%? d) Is the number you obtained in part

(c) identical to the elasticity of labor demand with respect to A? Which one is larger? Why?

e) The international price of the good that is produced in this labor market increases from 5 to 9 dollars. Find the change in wages and employment associated with the increase in py.

f) Draw a graph of the log labor supply equation and the log labor demand equation.

h) Draw the graph of the log excess of demand equation (log Ldlog Ls). Make sure you label the axis, the magnitude of the slope, you identify the height of the intercept, and the exact point that it reaches zero. i) Now, add to the graph the excess of demand equation associated with and increase in py of 80%. How much does the height of the intercept changes? How much does the point in which it reaches zero move?