Suppose the marginal product of labor is MPN = 200 - 0.5Nwhere N is aggregate employment. The aggregate quantity of labor supplied is 300 + 8w, where w is the real wage. If a supply shock increases the marginal product of labor by 10 (to MPN = 210 - 0.5 N), by how much does the real wage increase?
A. 1
B. 2
C. 3
D. 4
Answer: B
You might also like to view...
The ratio of a change in consumption to a change in disposable income is the:
a. consumption function. b. propensity to consume. c. average propensity to consume. d. extra propensity to consume. e. marginal propensity to consume.
When considering the impact of institutions and policies on economic performance, it is most important to focus on
a. long-term economic growth. b. short-term economic growth. c. business cycle fluctuations. d. the labor force participation rate of married women.
An expected increase in the money supply will tend to cause
A) an increase in stock prices. B) a reduction in stock prices. C) no change in stock prices. D) an ambiguous effect on stock prices.
At the Larson Bakery the marginal products of the first, second, and third sales clerks are 30, 27, and 21 customers served, respectively. The total product (number of customers served) of the three sales clerks is
A. 30. B. 57. C. 78. D. 109.