Can anyone get me started on this?
A country has 2 regions, the North and South, which are identical in all respects except for the hourly wage and number of workers. The demand for labor in the region is Wn=$20 - .5En and Ws=$20 - .5Es where En and Es are millions of workers. Currently there are 6 million workers in the North and 18 million workers in the South. What is the wage in each region?
barring any exchange or movement between the two regions, and assuming all workers are hired,
Wn=20-.5(18) = 9
Ws=20-.5(6) = 17
Thanks.
Is the first one supposed to equal 11?
right, my bad.
To determine the wage in each region, we can start by substituting the given values into the demand equations for labor in each region.
For the North:
Wn = $20 - 0.5En
Wn = $20 - 0.5(6)
Wn = $20 - 3
Wn = $17
For the South:
Ws = $20 - 0.5Es
Ws = $20 - 0.5(18)
Ws = $20 - 9
Ws = $11
Therefore, the wage in the North region is $17 per hour, and the wage in the South region is $11 per hour.