Question: Please show all work. The right number(s) without work is worth zero points The marginal product of labor is given by: MPN = AK -

Please show all work.The right number(s) without work is worth zero points

The marginal product of labor is given by: MPN = AK - 2N.

(a) (5 points) Assume that A = 8 and K = 12. Suppose that the labor supply function for this economy is given by NS= 3 + w. Find the equilibrium real wage rate and the profit maximizing level of employment.

(b) (5 points) Suppose that A falls to 7 and labor supply is now given by: NS= 6 + w.

Find the new equilibrium real wage rate and the profit maximizing level of employment.

(c) (10 points) Explain exactly why the profit maximizing level of labor has changed.Be very specific with your answer as in using actual numbers.Begin your answer with:At the same level of labor input N*(from part a) the firm is no longer ...........

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