Principles of Microeconomics (MindTap Course List)
8th Edition
ISBN: 9781305971493
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 18, Problem 5CQQ
To determine
Growth of real wage.
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Around 1973, the U.S. economy experienced asignificant _________ in productivity growth, coupledwith a _________ in the growth of real wages.a. pickup; pickupb. pickup; slowdownc. slowdown; pickupd. slowdown; slowdown
(b) In a self-regulating economy āXā, labor supply is 40 million but labor demand is 10 million.
What will happen in goods and service market simultaneously? Explain this situation with relevant graph.
Based on your findings in a) is it denoting long run equilibrium? If not, will the economy be able to restore it? Explain with suitable graph.
Question Two
Using a diagram explain what happens to the long-run demand curve for labor if the price of labour increases? Decompose the changes into scale and substitution effects.
Suppose that the adult population is 210million, and there are 130 million who are employed and 5 million who are unemployed. Calculate the unemployment rate and the labor force participation rate.
Define unemployment and explain factors that determine the rate of unemployment given that labor market is in the steady state.
Why is the short-run demand curve for labor downward sloping? Why does a profit-maximizing firm hire workers up to the point where the wage equals the value of marginal product?
Chapter 18 Solutions
Principles of Microeconomics (MindTap Course List)
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- Explain why in the medium run an increase in the price of oil will cause an increase in the unemployment rate.arrow_forwardIf Jimmy's Dairy, cheese producer, keeps hiring more workers for their production lines, the total production will keep rising at an increasing rate. keep rising at a decreasing rate. eventually peak then decrease. eventually peak then remain at the peak.arrow_forwardEconomics Q)how changes in productivity influence the demand for labor. please explain correctltarrow_forward
- of Which of the following would cause an increase in the price level in the long run? Select one: a. There is an increase in the level of investment in the economy. b. There is an increase in the supply of workers from migration. c. There is a temporary increase in the price of oil.arrow_forwardDescribe the need to be flexible in their approach to work, responding positively to changes or amendments required by the business.arrow_forwardāWhen computers were first introduced in production, what affect do you think they had on labor productivity? Explain and illustrate this effect on the long-run equilibrium levels of output and the price level.āarrow_forward
- The main difference between the short run and the long run is that firms earn zero profits in the long run the long run always refers to a time period of one year or longer in the short run, some inputs are fixed in the long run, all inputs are fixed 2 A recession is a decline in the inflation rate that lasts six months or longer the unemployment rate that lasts six months or longer real GDP that lasts six months or longer potential GDP that lasts six months or longerarrow_forwardQuestion 16 When is it not in the best interest of a company to hire additional workers in the short run? when the average product of labor is decreasing when the firm is in Stage II of the production process when the marginal revenue product equals zero when the wage rate is equal to or greater than labor's marginal revenue productarrow_forwardQUESTION 15 As we hire more workers why does our marginal cost (MC) increase? a. Out of jealousy (of our growing economic prowess) the government will begin to impose fines on us b. Actually, MC is not affected by hiring workers c. Our MPL stays constant, but the wage increases d. Our MPL decreases, but the wage stays constantarrow_forward
- If more and more labor is employed while keeping all other inputs constant, the marginal physical productivity of labor a. will eventually increase. b. will eventually decrease. will eventually remain constant. d. cannot tell from the information provided.arrow_forwardin order for a production curve to shift out? a. there has to be more unemploymentĀ b. there has to be an increase in supply c. there has to be an increase in demand d. there has to be an increase in technologyarrow_forwardQUESTION THREE (i)Use the knowledge of economics to discuss factors to analyse factors that affect peopleāsā decision to work.(ii) When is the firm operating in the short run and when does it operate in the long run?Ā (iii) Discuss the factor(s) that determine how many workers the firm wishes to hire in the long run.arrow_forward
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