Macroeconomics 1st Edition by Dean Karlan,Jonathan Morduch

Exercise 18

Assume that the labor demand equation for a fictional country is L d = 30 - w, where w is the wage per hour worked. Assume also that the labor supply equation for that country is L s = 0.5( w ).
a. Find the equilibrium wage and quantity of labor employed.
b. At the equilibrium wage, how many people are unemployed?
c. How would the number of unemployed change if the supply of workers increased? What if the demand for workers decreased?