consider the folloing eco

consider the folloing eco

consider the folloing economy with a classical labor market. Production function Y=100[(K)^.2][(L)^.7], MP=70[(K)^.2][(L)^.7], labor supply L=10[(1-t)w]^2. Definitions: Y=output, K = capital stock, t= Marginal tax rate, w=real wage rates.a. Find the labor demand scheduleb. Calculate the equilibrium levels of w and L and the total after-tax income of workers. Assume that t=0 and k=100c. Find the level of potential GDPd. Find the equilibrium levels of w, L, and potential GDP when t = .25 and k=100e. Find the equilibrium levels of w, l, and potential GDP when t=.25 and k=125

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