# Answer to Question #31698 in Macroeconomics for Bonaventure Kobela

Question #31698

Assume that the production function of an economy is given by : Y = A(100N-0.5N) note: O.5N is squared

Where Y is output, A is productivity, and N is total hours worked. The marginal product of labour

associated with this production function is ;

MPN =A(100-N). Initially , A=1.0, but a beneficial productivity shock raises A to 1.1.

The supply of labour is NS =45+0.1w where w is the real wage. Fnd the equilibruim levels of output, hours worked, and the real wage before and after the productivity shock.

Where Y is output, A is productivity, and N is total hours worked. The marginal product of labour

associated with this production function is ;

MPN =A(100-N). Initially , A=1.0, but a beneficial productivity shock raises A to 1.1.

The supply of labour is NS =45+0.1w where w is the real wage. Fnd the equilibruim levels of output, hours worked, and the real wage before and after the productivity shock.

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