The marginal product of labor (measured in units of output) of a firm is given by MPN = A(2000 - N)where A measures productivity and N is the number of labor hours used in production. Suppose the price of output is $6 per unit and A = 0.002. (a)What will be the demand for labor if the nominal wage is $18?(b)What will be the demand for labor if the nominal wage rises to $21?
What will be an ideal response?
| (a) | The real wage = $18/$6 = 3. Setting the real wage equal to the marginal product of labor gives 3 |
| (b) | The real wage = $21/$6 = 3.5. Setting the real wage equal to the marginal product of labor gives |
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Which of the following is FALSE about private savings and government savings?
A) SP = Y - T - C B) Unlike private saving decisions, government saving decisions are often made with an eye toward their effect on output and employment. C) Total savings (S) = SP + . D) The national income identity can help us to analyze the channels through which government saving decisions influence macroeconomic conditions. E) None of the above; all statements are true.
William and Jamal live in the country of Dumexia. When Dumexia legalized international trade in bananas, the price of bananas in Dumexia increased. As a result, William became better off and Jamal became worse off. It follows that William is a seller, and Jamal is a buyer, of bananas
a. True b. False Indicate whether the statement is true or false
Redistribution of income from the rich to the poor is achieved from a tax system that requires taxes to rise with income. Which of the following criteria best explains the goal of this tax system?
A. stability B. efficiency C. growth D. equity
Refer to the information provided in Figure 23.9 below to answer the question(s) that follow.
Figure 23.9Refer to Figure 23.9. As a result of an increase in investment by $20 million, aggregate expenditures shifts ________, ________ equilibrium output and equilibrium expenditure.
A. down; increasing B. down; not changing C. up; increasing D. down; decreasing