Equilibrium of the economy
The production function is Y = 10N. Households utility function is ln(c)+ 2ln(l). Denote the wage rate by w and assume total time endowment of household is 1.
Find the firm's labor demand and supply functions and the equilibrium of the economy.
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The production function is Y = 10N. Households utility function is ln(c)+ 2ln(l). Denote the wage rate by w and assume total time endowment of household is 1. Find the firm's labor demand and supply functions and the equilibrium of the economy.
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