. OldGermans. In Germany, the birth rate is low and the population is aging. As a result,...

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OldGermans. In Germany, the birth rate is low and the population is aging. As a result, the working age population is falling at about 0.2% per year. It has been suggested that this population decline puts the German economy at risk. This question asks you to use our simple neoclassical model to evaluate that claim. = Let there be Ls 243 German workers who inelastically supply labor and who spend all of their income on beer consumption. These workers own the representative German beer firm which has production function f(L) = 54 14/5. There is no money, so the price of one beer is one beer. (a) Find the equilibrium real wage in the labor market and graph the labor market. (b) Verify that the national income accounts identity holds so that there is also equilibrium in the beer market. Graph the production function. What share of workers' income comes from wages and what share from the profits of the firm? (c) Suppose that over 10 years, the German population falls and there are only Ls' 198 workers. Find the new general equi- - librium. OldGermans. In Germany, the birth rate is low and the population is aging. As a result, the working age population is falling at about 0.2% per year. It has been suggested that this population decline puts the German economy at risk. This question asks you to use our simple neoclassical model to evaluate that claim. = Let there be Ls 243 German workers who inelastically supply labor and who spend all of their income on beer consumption. These workers own the representative German beer firm which has production function f(L) = 54 14/5. There is no money, so the price of one beer is one beer. (a) Find the equilibrium real wage in the labor market and graph the labor market. (b) Verify that the national income accounts identity holds so that there is also equilibrium in the beer market. Graph the production function. What share of workers' income comes from wages and what share from the profits of the firm? (c) Suppose that over 10 years, the German population falls and there are only Ls' 198 workers. Find the new general equi- - librium.

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a In order to find the equilibrium real wage in the labor market we need to set the quantity of labo... View the full answer