1 Suppose labor supply can be described as ES 01w 2000 where

1. Suppose labor supply can be described as ES -0.1w -2,000 where w is yearly salary a. How many workers are willing to work when the yearly salary is $20,000? b. How many workers are willing to work when the yearly salary is $30,000? c. How many workers are willing to work when the yearly salary is $10,000? 2. Suppose labor demand can be described as ED 120,000-1.5w, where w is yearly salary a. b. c. How many workers are demanded at a wage of $60,000? How many workers are demanded at a wage of $80,000? How many workers are demanded at a wage of $30,000?

Solution

1) a) 20,000 = 0.1w - 2000

22,000/0.1= w = 220,000

b)30,000 = 0.1w - 2000

32,000/0.1= w = 320,000

c) 10,000 = 0.1w - 2000

12,000/0.1= w = 120,000

2) a) 1.5w = 60,000

w= 40,000

b) 1.3w = 40,000/1.5

w= 26,667

c)1.5w = 90,000

w= 60,000