EC 202, Spring 2017, Professor: Ishita Dey, Boston University Name: ___________________________ Problem Set#1 based on Chapters 2 and 3 Due in-class...

If Y = 20N -N^2/2 where N stands for labor hours, Y is output. If WP= 5, how many hours should the firm hire labor for? Should the firm hire labor for the 10th hour? Should the firm hire labor for the 20th hour? Why or why not?

 Suppose Y = 40+30N-????^2/2 and Labor Supply: ???????? = 10 + 3????/????

a) Write the equation for the Labor Demand curve.

b) Find the equilibrium real wage, employment and output.