Assignment task: In a rural neighborhood, the aggregate labor supply curve is given by Ls = -40 + 10ω while the aggregate labor demand by Ld = 160 - 10ω, where ω is the hourly wage rate. Suppose a new firm builds a major processing site in in the rural town after the decrease in the equilibrium wage. As a result, the aggregate labor supply curve is and the new aggregate labor demand curve is now Ls = -20 + 10ω and the new aggregate labor demand curve is now Ld = 180 - 10ω.
a. Calculate the new equilibrium level of employment and wage.
b. If a worker in this market works an 8-hour day and plans to spend the entire day's income to buy BTS memorabilia at about $20 a piece, what is the worker's real wage in terms of BTS trinkets?