.) Output in Rumantily is produced using capital and labor. There is initially a fixed amount of capital (K0), but the amount of labor may be varied in accordance with labor market conditions. What will happen to real wages and employment in Rumantily if aliens drop off enough capital to effectively double the amount of capital available to workers? Increase, increase Increase, decrease Uncertain, increase Increase, uncertain

.) Output in Rumantily is produced using capital and labor. There is initially a fixed amount of capital (K0), but the amount of labor may be varied in accordance with labor market conditions. What will happen to real wages and employment in Rumantily if aliens drop off enough capital to effectively double the amount of capital available to workers? Increase, increase Increase, decrease Uncertain, increase Increase, uncertain

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter24: The Aggregate Demand/aggregate Supply Model

Section: Chapter Questions

Problem 46CTQ: Hydraulic fracturing (tracking) has the potential to significantly increase the amount of natural...

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1) In an economy, the total output of all the firms is described by Y = 8 * K^0.25 * L^0.75. For it, The price level is P=20 and the cost of a unit of capital is R=6. There are L=10 workers in the economy. The payments for capital, or the capital bill, amount to RK=752 in the economy. Find the payments for wage, or wage bill, WL, in the economy. The answer is 2258, I need assistance with how to solve and get that answer
1) Suppose the marginal product of labor in the economy is given by MPN = 0.005(18,000 005N), while the supply of labor is 2000 rate and level of employment. (b) What happens to the wage rate and employment if wealth rises, reducing the supply of labor to 200 + 1000w? + 1000w. (a) Find the market-clearing real wage
Case C: Galaxy Multinational. Galaxy, a multinational corporation, has two plants, one in the United States and the other in Mexico, and it cannot change the size of the plants or the amount of capital equipment in the short run. The wage in Mexico is equivalent to US $5 per hour. The wage in the U.S. is $25 per hour. Given current employment situation, the productivity per worker in Mexico is 200 units per hour, and the productivity per worker in the U.S. is 400 units per hour. Is Galaxy maximizing output relative to its labor cost? If not, what should Galaxy do? Justify your answer.
Q2. Suppose that the markup of goods prices over marginal cost is 10% and the wage setting equation is W = P(1 - u); where u is the unemployment rate. (a) What is the real wage, as determined by the price-setting equation? (b) What is the natural rate of unemployment? (c) Suppose that the markup of prices over costs increases to 20%. What happens to the natural rate of unemployment? Explain the logic behind your answer.
2. Production function: Y=8(K^.33)(L^.66) What if there is skill biased technological change that makes capital more productive relative to labor such that alpha or the exponent on K rises to .5 and the exponent on L falls to .5 a) What is the new equilibrium real wage (assume no change in the labor supply equation & K = 1)? Labor Supply= (w/p)^2 b) What is the new equilibrium R/P (assume no change in the capital supply equation & L = 4)? Capital Supply= 1000(R/P)
Assume that the total productivity in our country decreases (a negative shock to the production function). a) Using a graph, What happens to the demand curve for labor? b) Using a graph, How would the decline in productivity affect the labor market (employment, unemployment and real wages), if labor market is always in equilibrium? c) Using a graph, How would decreases in productivity affect the labor market if unions prevented the decline in real wages?
Chapter 7: Growth accounting Assume: Yı = 1000 K1 = 2500 LF1= 500 Y2 = 1300 K2 = 3250 LF2=575 g= 30% gk = 30% gL = 15% Assume 30% of national income goes to capital, and 70% goes to labour. Calculate the residual. A) B) if wk = 0.5 and wL = 0.5, calculate the residual. C) if wk = 0.5 and wL = 0.5, and a = 0.105, calculate g
Consider a country in which there are two sectors, called Sector a and Sector b. The production function of the two sectors are: Y₁ = (La)ª, and Y₁ = (L₁)¤ with 0 ≤ a ≤ 1 and with La as the number of workers employed in sector a and L, as the number of workers employed in sector 6. The total number of workers in the economy is: The only difference between the sectors is that in sector a workers are paid their marginal dy, whereas in sector 6, workers are paid their average product product Y₂ dLa La Workers can move freely between the sectors and they do so until wages are equal. In this case, the value of La is: La O La Labor misallocation and efficiency 1 = 1+a¹/(a) La 1-a = 1+a¹/(a−1) a 1+a¹/(a−-1) ● La = 1+al/(a-1) α 1+a¹/(a) = = 1 = La + Lb Save Answer
Calculate the c) Employment in manufacturing sector d) Employment and wage in service sector
The number of adults not in the labor force of a country equals 6 million, and the number of individuals employed is 5 million. If there are 12 million potential adult workers in the economy, what is the current unemployment rate in this country? 45 percent 67 percent 21 percent 55 percent If the opportunity cost of working outside the home increases, then ________ the labor supply curve, assuming all else equal. there will be a left shift in there will be a right shift in there will be an upward movement along there will be a downward movement along Which of the following statements is true? Technological innovation always leads to unemployment in an economy as a whole. Technological innovation can cause wages to fall for some workers in an economy. Technological innovation increases wages for all workers in an economy. Technological innovation reduces the demand for goods and services in an economy. If the annual inflation rate in an economy is i, then $1 borrowed at the…
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