The first table above gives the labor demand and labor supply schedules for a nation. The second table gives its production function
a. What are the equilibrium real wage rate and the level of employment?
b. What is potential GDP?
a. The equilibrium real wage rate is $15 an hour because this is the real wage rate for which the quantity of labor demanded equals the quantity supplied. The equilibrium level of employment is 3 billion hours a year.
b. With employment equal to 3 billion hours per year, potential GDP is equal to $60 billion.
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According to the figure above, which of the following events will increase the quantity demanded of bottled water?
A) a fall in the price of soda B) a rise in the price of a fitness club membership C) an increase in the number of buyers of bottled water D) a fall in the price of bottled water E) a rise in the price of bottled water
The government sector balance is equal to ________
A) net taxes minus government purchases of goods and services B) tariffs minus imports C) saving minus investment D) exports minus imports
The free rider problem is caused by the:
A. nonexcludability of a good leading to the undersupply of it. B. incentive to oversupply the good since it is nonrival in consumption. C. "rivalness" in consumption of a good leading to the overconsumption of that good. D. "rivalness" in consumption of a good leading to the undersupply of it.
Explain how globalization impacts inflation in both the short run and the long run.
What will be an ideal response?