Macroeconomics
10th Edition
ISBN: 9780134896441
Author: ABEL, Andrew B., BERNANKE, Ben, CROUSHORE, Dean Darrell
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 11, Problem 5AP
To determine
To Evaluate: Effects on different economic variable under different condition using IS-LM model.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Pizzas are produced using capital as a specific factor and labor as a mobile factor. The graph below shows the marginal product of labor curve:
MPL, Real wage
50
MPL
20
120
200
Suppose the real wage is 20. Calculate: capital owners' total real rent, workers' total real wage bill, and total output in the pizza industry.
Question 39
Givens:
min
w *L+r* K
L> 0, K >0
% < K5 » L5
s.t.
• The marginal product of labor: MPL = .5 * *
• The marginal product of capital: MPK = .5 *
• Baseline Scenario: w = $10, r = $10 and qo = 200
• New Scenario: w = $10, r = $2.50 and go = 200
Equation Description: A firm is attempting to minimize total cost subject to sufficiently employing units of labor and units of capital to produce an output level at least as large as a specified output quota. Total cost equals the cost to employing units of labor
plus the cost to employing units of capital. A firm's production function is the product of two terms: the fırst term is units of capital raised to the .5 power; and, the second term is units of labor raised to the 5 power. The marginal product of labor equals the
product of three terms: the first term is .5; the second term is units of capital raised to the .5 power; the third term is units of labor raised to the -.5 power. The marginal product of capital equals the product of…
Q49
In order to maximize profits, a firm needs to determine the quantity of each factor that it will employ, which is dictated by price as well as productivity of the factor. Assume farmer in the Ottawa area named Justin Trudeau has fixed amounts of land and capital finds that total product is 24 for the first worker hired, 32 when two workers are hired, 37 when three are hired, and 40 when four are hired. The farmer's product sells for $3 per unit, and the wage rate is $13 per worker. The marginal revenue product of the second worker is
Multiple Choice
$9
$15
$24
$8
$14.
Knowledge Booster
Similar questions
- Q1). Suppose the labor market is initially at its equilibrium, i.e., the labor supplied equals the labor demanded. Now suppose IBM develops a new computer chip that makes computer incredibly faster. Explain and show graphically how the arrival of a new, more productive technology affects the labor market. Draw the full graph and provide a detailed explanation of the effect. Label the axes/curves, explain why either the aggregate labor demand curve or the aggregate labor supply curve shifts and describe the economic mechanism that moves the economy from the old to the new equilibrium.arrow_forwardAccording to the Classical labor demand curve, if wages increase from $10 to $20. employees will want to work more employers will want to hire less people employees will want to work less employers will want to hire more people Question 10 (1 point) According to the Classical labor supply curve, what would happen when wages increase from $10 to $20? O employers will want to hire less people employers will want to hire more people O employees will want to work less employees will want to work morearrow_forwardThe labour market in an economy is characterised by the following equations: W = 0.7-0.9u ре Wage setting: W = 0.5 P Price setting: In which W is nominal wages, pe and P are expected nominal prices and nominal prices, respectively, u is level of unemployment. Consider a linear production function for firms such that Q = N, i.e., production for firms (Q) depends only on the number of employees (N). Considering this information, which of the following statements are CORRECT: U The price mark-up (u) for this economy is 1 (i.e. µ = 1). O If actual output is below potential output, actual unemployment rate is below 0.22, (i.e. uț < 0.22). The equilibrium unemployment in this economy is 0.22 (i.e. ue = 0.22). U If wage setters become less responsive to changes in unemployment (e.g., from -0.9 to -0.7), the equilibrium unemployment decreases.arrow_forward
- Summarize the articel. KUALA LUMPUR, Nov 3 ― A research by Khazanah Research Institute (KRI) found that agriculture employment has declined significantly to just 10.2 per cent out of the total employment nationwide in 2019, from 31.2 per cent in 1982. According KRI’s recently published report, “Work in an Evolving Malaysia: The State of Households 2020 Part II”, the decline was due to the country’s economic structure that has evolved over the years and caused concentration of economic activities continuing to differ between states. “The agriculture sector however remains an important source of employment in the north and east coast states such as Pahang, and in Sabah and Sarawak,” said KRI in the report. KRI found that the agriculture jobs tend to have slower productivity levels (Gross Domestic Product per employment) compared to states with less concentration in agricultural activities. “Additionally, agriculture has consistently reported a higher incidence of fatal injuries. “In some…arrow_forwardSuppose P = $144, MPL = 39, and APL = 26, MPK = 72, and APK = 45. What is the value marginal product of labor (AKA marginal revenue product of labor)? $ What is the value marginal product of capital (AKA marginal revenue product of caplital? $arrow_forward* 00 %24 キ 3 S. Labor market definitions Complete the following table by selecting the term that matches each definition on the left. Market Market Labor Labor Marginal Product of Value of the Demand Supply Marginal Product of Labor Definition Curve Curve Labor The increase in the amount of output from an additional unit of labor The graphical representation of the relationship between the wage rate and the quantity of labor firms are willing to hire in a market The graphical representation of the relationship between the wage rate and the quantity of labor workers are willing to provide in a market The additional revenue the firm receives from selling the output produced from an additional unit of labor Which of the following events may increase labor supply? Check all that apply. An increase in the working population OA decrease in the wage rate OA decrease in the working population An increase in women's desire to work rather than stay at home with their kids (in other words, a…arrow_forward
- Can you put a solution to this? Instruction: (see other instructions below, for the submission of answer sheet) A. Complete the Column for MRS. Show your solution for each answer, Number each solution that corresponds to each unknown MRS. B. Graph the Labor-Capital function, making sure that Labor units are in the horizontal axis MRS = change in K/ change in L change in K = final K - initial K change in L = final L - initial L MRS = 26-30 /2-1 MRS = -4/1 MRS = - 4 Units of Labor Capital MRS 1 30 0 2 26 -4 3 22.5 (1) 4 19.5 (2) 5 17 (3) 6 15 (4) 7 13.5 (5) 8 12.5 (6) 9 12 (7) 10 12 (8)arrow_forwardComputerization/automation have led to job growth in O jobs whose tasks are largely non-routine O jobs whose tasks are largely routine manual O jobs whose tasks are largely routine cognitivearrow_forwardWhat does the assumption of market clearing imply? Explain. How applicable is this assumption to the labour market in the long run and short-run? Explain both. How applicable is this assumption to the market for fast food meals in the long run and short run? Explain both.arrow_forward
- Assume that we are in a long-run environment and a firm employs two groups ofworkers, medium-skilled and low-skilled (there is no capital used by this firm). Low-skilled workers are paid $7.25 per hour, whereas medium-skilled workers are paid $17. Assume that both groups of workers are normal inputs into the production process andthe government increases the minimum wage to $15. Workers in the medium-skilledgroup are happy because they believe that the firm will increase their work hours now.Are the medium-skilled workers correct in their assessment? Explain why or why not.arrow_forwardRefer to the graph to answer this question. Which of the following will make Labor Demand for Grotto Pizza shift from D1 to D2? A. Less people want to eat at Grotto pizza. B. More people move to Delaware from other states. C. More people want to eat at Grotto Pizza. D. More people move to Delaware from other countries.arrow_forward8. Suppose the marginal product of labor is MPN = 200 - 0.5N where N is aggregate employment. The aggregate quantity of labor supplied is 300 + 8w, where w is the real wage. What is the equilibrium real wage? a. 5 b. 10 C. 15 d. 20arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Microeconomics (MindTap Course List)EconomicsISBN:9781305971493Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Microeconomics (MindTap Course List)
Economics
ISBN:9781305971493
Author:N. Gregory Mankiw
Publisher:Cengage Learning