Question 1

The fact that the production function relating output to capital becomes flatter as we move from left to right means that&#10;A)the marginal product of labour is positive.&#10;B)the marginal product of capital is positive.&#10;C)there is diminishing marginal productivity of labour.&#10;D)there is diminishing marginal productivity of capital.&#10;

Accepted Answer

As we move from left to right, the production function becomes flatter, indicating diminishing marginal productivity of capital. This means that each additional unit of capital added to the production process leads to smaller increases in output.

Question 2

Under certain circumstances,the production function Y = AF(K,N)can be rewritten as Y = ANF(K,N).In this case,suppose that both K and N double.What happens to output?&#10;A)It remains unchanged.&#10;B)It is reduced by one half.&#10;C)It is increased by a factor of 4.&#10;D)It doubles.&#10;

Accepted Answer

When the production function can be rewritten as Y = ANF(K,N), it implies that the production function exhibits constant returns to scale. Thus, if both K and N double, output Y will also double.

Question 3

The total factor productivity is&#10;A)a measure of the overall effectiveness with which capital and labour are used.&#10;B)shown by A in the production function Y = AF(K.N).&#10;C)used as a measure of technological improvement.&#10;D)all of the above.&#10;

Accepted Answer

The total factor productivity (TFP) is a measure of how efficiently the inputs of capital and labour are used in production, as well as a measure of technological improvement. This is shown by the parameter A in the production function Y = AF(K,N). Therefore, all of the choices are correct.

Question 4

Which of the following statements is true?&#10;A)The marginal product of capital is positive as long as the production function's slope is positive.&#10;B)The marginal product of capital is positive as long as the production function's slope is zero.&#10;C)The marginal product of capital is negative as long as the production function's slope is positive.&#10;D)The marginal product of capital is negative as long as the production function's slope is zero.&#10;

Accepted Answer

The marginal product of capital (MPl) is the change in output that results from a one-unit change in the amount of capital used, holding all other inputs constant. It is given by the slope of the production function. If the production function's slope is positive, then MPl is positive, indicating that an increase in capital leads to an increase in output. Therefore, statement A is true. Statement B is false because if the slope of the production function is zero, then MPl is also zero, not necessarily positive. Statements C and D are false because if the production function's slope is positive, then MPl must also be positive, and if the slope is zero, then MPl can be either positive or zero, depending on the level of capital used.

Question 5

The principle of diminishing marginal productivity of capital implies that&#10;A)output will diminish as capital increases.&#10;B)output will increase first,but it will decrease as capital increases.&#10;C)output will increase at diminishing rate as capital increases.&#10;D)output will decrease first,but it will increase as capital increases.&#10;

Accepted Answer

The principle of diminishing marginal productivity of capital suggests that as more and more units of capital are added to a production process, the increase in output will eventually start to decline because each additional unit of capital becomes less and less productive. This implies that output will increase at a diminishing rate as capital increases, making choice C the best option.

Question 6

The table below represents Freedonia's macroeconomic data for 2002 and 2003.
$\begin{array} { c c c c } \text { Year } & \text { Y } & \mathrm { K } & \mathrm { N } \\\hline 2002 & 2000 & 1700 & 70 \\2003 & 2100 & 1785 & 75 \\\hline\end{array}$
Suppose that the production function is given by Y = AK?.²? ??.??.Between 2002 and 2003,total factor productivity of Freedonia's economy increased by

A)-1.5%.
B)5.0%.
C)5.5%.
D)12.7%.

Accepted Answer

The answer of The table below represents Freedonia's macroeconomic data...

Question 7

In the production function Y = AF(K,N),A is ________,K is ________,and N is ________.&#10;A)total factor productivity;the capital stock;the number of workers employed&#10;B)total factor productivity;investment;the number of workers employed&#10;C)the productivity of labour;the capital stock;the size of the labour force&#10;D)the productivity of labour;investment;the size of the labour force&#10;

Accepted Answer

A represents the correct terms for the variables in the production function. A represents total factor productivity, which is a measure of the efficiency with which inputs (capital and labor) are used in production. K represents the capital stock, which includes all the physical assets that are used in the production process. N represents the number of workers employed, which is one of the most important factors in determining the output level.

Question 8

The fact that the production function relating output to labour becomes flatter as we move from left to right means that&#10;A)the marginal product of labour is positive.&#10;B)the marginal product of capital is positive.&#10;C)there is diminishing marginal productivity of labour.&#10;D)there is diminishing marginal productivity of capital.&#10;

Accepted Answer

As the production function becomes flatter, it indicates that the additional output produced by an additional unit of labor is decreasing or that there is diminishing marginal productivity of labor. Therefore, the correct choice is C. The marginal product of capital is not mentioned or relevant in this scenario.

Question 9

The principle of diminishing marginal productivity of labour implies that&#10;A)output diminishes as labour increases.&#10;B)output will decrease first,but it will increase as labour increases.&#10;C)output increases at diminishing rate as labour increases.&#10;D)output will increase first,but it will decrease as labour increases.&#10;

Accepted Answer

The principle of diminishing marginal productivity of labour states that as units of labour are added to the production process while holding all other inputs constant, the resulting increase in output will eventually decrease. This is because each additional unit of labour is less productive than the one before it due to factors such as crowding, limited resources, and decreased coordination. Therefore, output increases, but at a decreasing rate as labour increases.

Question 10

The principle of diminishing marginal productivity implies that&#10;A)if we increase labour and capital,the output will eventually decrease.&#10;B)if we decrease labour and capital,the output will decrease.&#10;C)if we increase one input while keeping other inputs constant,the productivity of variable input will decrease.&#10;D)if we increase one input while keeping other inputs constant,the output will decrease.&#10;

Accepted Answer

The principle of diminishing marginal productivity states that if we increase one input while keeping other inputs constant, the productivity of that variable input will eventually decrease. This is because the fixed inputs become a bottleneck for further increases in output. Eventually, increasing the variable input will lead to a point where the additional output gained is less than the additional input cost, leading to diminishing marginal productivity. Therefore, option C is correct. The other options are incorrect because they do not reflect the principle of diminishing marginal productivity.

Question 11

The marginal product of capital&#10;A)is measured by the slope of the line tangent to the production function relating output and capital.&#10;B)is larger when the capital stock is relatively larger.&#10;C)is smaller when the capital stock is relatively smaller.&#10;D)displays diminishing marginal productivity only when the capital stock is small.&#10;

Accepted Answer

The answer of The marginal product of capital&#10;A)is measured by...

Question 12

Suppose the economy's production function is Y = AK&#8304;.&#179;&#7482;&#8304;.&#8311;.When K = 1000,N = 50,and A = 15,what is Y?&#10;A)1842&#10;B)6106&#10;C)750,000&#10;D)123&#10;

Accepted Answer

The answer of Suppose the economy's production function is Y...

Question 13

Technological progress is measured by&#10;A)average labour productivity.&#10;B)marginal product of labour.&#10;C)total factor productivity.&#10;D)marginal product of capital.&#10;

Accepted Answer

The answer of Technological progress is measured by&#10;A)average labour productivity.&#10;B)marginal...

Question 14

Suppose that in 2002 Freedonia had GDP equal to 2000 million,the capital stock was equal to 1700 million,the number of employees equaled 70 million.The production function is Y = AK⁰.²⁵ᴺ⁰.⁷⁵.Total factor productivity of the economy in that year was approximately equal to

A)0.09.
B)2.61.
C)4.19.
D)12.87.

Accepted Answer

The answer of Suppose that in 2002 Freedonia had GDP...

Question 15

The marginal product of labour&#10;A)is measured by the slope of the production function relating capital to employment.&#10;B)is larger when the labour supply is relatively larger.&#10;C)is smaller when the labour supply is relatively smaller.&#10;D)decreases as the number of workers already employed increases.&#10;

Accepted Answer

The answer of The marginal product of labour&#10;A)is measured by...

Question 16

In a production function where capital (K)is raised to the power 0.3 and labour (N)is raised to the power 0.7&#10;A)the production function relating output and labour is not as sharply bowed as the production function relating output and capital.&#10;B)the production function relating output and labour is as sharply bowed as the production function relating output and capital.&#10;C)the production function relating output and capital is not as sharply bowed as the production function relating output and labour.&#10;D)the production function relating output and capital is bowed,but the production function relating output and labour is not bowed.&#10;

Accepted Answer

The answer of In a production function where capital (K)is...

Question 17

The two main characteristics of the production function are&#10;A)it slopes downward from left to right,and the slope becomes flatter as the input increases.&#10;B)it slopes upward from left to right,and the slope becomes steeper as the input increases.&#10;C)it slopes upward from left to right,and the slope becomes flatter as the input increases.&#10;D)it slopes downward from left to right,and the slope becomes steeper as the input increases.&#10;

Accepted Answer

The answer of The two main characteristics of the production...

Question 18

In a graph of the production function relating output to capital,it is NOT true that&#10;A)labour supply increases as capital increases.&#10;B)the marginal product of capital can be measured as the slope of the production function.&#10;C)the marginal product of capital falls as the capital stock increases.&#10;D)the shape of the production function reflects diminishing marginal productivity.&#10;

Accepted Answer

The answer of In a graph of the production function...

Question 19

In the production function Y = AF(K,N),A is&#10;A)labour productivity.&#10;B)total factor productivity.&#10;C)capital productivity.&#10;D)the marginal productivity of capital.&#10;

Accepted Answer

The answer of In the production function Y = AF(K,N),A...

Question 20

Suppose the economy's production function is Y = AK⁰.³ᴺ⁰.⁷.If K = 1000 and N = 50,then
Y = 2000.What is Y if K = 2000 and N = 100?

A)4000
B)3500
C)3400
D)3000

Accepted Answer

The answer of Suppose the economy's production function is Y...

Question 21

Which market determines the real wage and employment?&#10;A)the goods market&#10;B)the money market&#10;C)the labour market&#10;D)the capital market&#10;

Accepted Answer

The answer of Which market determines the real wage and...

Question 22

A profit-maximizing firm would hire more employees if&#10;A)marginal product of labour exceeds real wage.&#10;B)marginal product of labour is less than real wage.&#10;C)marginal revenue product of labour is less than real wage.&#10;D)marginal revenue product of labour is less than nominal wage.&#10;

Accepted Answer

The answer of A profit-maximizing firm would hire more employees...

Question 23

One reason that firms hire labour at the point where w = MPN is A)if w < MPN,the cost (w)of hiring additional workers exceeds the benefits (MPN)of hiring them,so they should hire fewer workers. B)if w > MPN,the cost (w)of hiring additional workers is less than the benefits (MPN)of hiring them,so they should hire more workers. C)if w < MPN,the cost (w)of hiring additional workers equals the benefits (MPN)of hiring them,so they have the right number of workers. D)if w > MPN,the cost (w)of hiring additional workers exceeds the benefits (MPN)of hiring them,so they should hire fewer workers.

Accepted Answer

The answer of One reason that firms hire labour at...

Question 24

The Widget Company has the following production function:
$\begin{array} { c c } \begin{array} { c } \text { Number of } \\\text { Workers }\end{array} & \begin{array} { c } \text { Number of } \\\text { Widgets Produced }\end{array} \\\hline 0 & 0 \\1 & 9 \\2 & 17 \\3 & 24 \\4 & 30 \\5 & 35\end{array}$
If widgets sell for $6 each and the wage rate is $33,how many workers will the company hire?

A)0
B)1
C)2
D)4

Accepted Answer

The answer of The Widget Company has the following production...

Question 25

An increase in the real wage would result in a&#10;A)movement along the labour demand curve,causing an increase in the number of workers hired by the firm.&#10;B)shift of the labour demand curve,causing an increase in the number of workers hired by the firm.&#10;C)movement along the labour demand curve,causing a decrease in the number of workers hired by the firm.&#10;D)shift of the labour demand curve,causing a decrease in the number of workers hired by the firm.&#10;

Accepted Answer

The answer of An increase in the real wage would...

Question 26

Firms hire labour at the point where the&#10;A)nominal wage rate equals the marginal product of labour.&#10;B)real wage rate equals the marginal revenue product of labour.&#10;C)nominal wage rate equals the marginal revenue product of labour.&#10;D)real wage rate equals the marginal revenue product of capital.&#10;

Accepted Answer

The answer of Firms hire labour at the point where...

Question 27

What two factors should you equate in deciding how many workers to employ?&#10;A)the marginal product of labour and the marginal product of capital&#10;B)the marginal product of labour and the real wage rate&#10;C)the marginal product of labour and the real interest rate&#10;D)the marginal product of capital and the real wage rate&#10;

Accepted Answer

The answer of What two factors should you equate in...

Question 28

An increase in the real wage rate will cause&#10;A)the labour supply curve to shift to the right.&#10;B)the labour demand curve to shift to the left.&#10;C)both the labour supply curve and the labour demand curve to shift to the right.&#10;D)a movement along the labour demand curve.&#10;

Accepted Answer

The answer of An increase in the real wage rate...

Question 29

The Grungo Company has the following production function:
$\begin{array} { c c } \begin{array} { c } \text { Number of } \\\text { Workers }\end{array} & \begin{array} { c } \text { Number of } \\\text { Grungos Produced }\end{array} \\\hline 0 & 0 \\1 & 10 \\2 & 19 \\3 & 26 \\4 & 31 \\5 & 34\end{array}$
If the real wage rate is 6,how many workers will the company hire?

A)0
B)1
C)3
D)5

Accepted Answer

The answer of The Grungo Company has the following production...

Question 30

Economists often treat the economy's capital stock as fixed because&#10;A)labour is a more important factor of production than capital,so economists ignore capital.&#10;B)it takes a long time for new investment and the scrapping of old capital to affect the overall quantity of capital.&#10;C)there is very little capital in the economy compared to the amount of labour.&#10;D)unless the interest rate changes,the capital stock doesn't change.&#10;

Accepted Answer

The answer of Economists often treat the economy's capital stock...

Question 31

Firms hire labour at the point where&#10;A)the nominal wage is equal to the marginal revenue product of labour.&#10;B)the real wage is equal to the marginal product of labour.&#10;C)the cost and the benefit of hiring additional labour are the same.&#10;D)all of the above.&#10;

Accepted Answer

The answer of Firms hire labour at the point where&#10;A)the...

Question 32

Zowie! Surfboards has the following production function:
$\begin{array} { c c } \begin{array} { c } \text { Number of } \\\text { Workers }\end{array} & \begin{array} { c } \text { Number of } \\\text { Surfboards Produced }\end{array} \\\hline 1 & 12 \\2 & 21 \\3 & 29 \\4 & 36 \\5 & 42 \\\hline\end{array}$
If surfboards sold for $30 and the nominal wage rate was $200,how many workers would the firm employ?

A)2
B)3
C)4
D)5

Accepted Answer

The answer of Zowie! Surfboards has the following production function:&#10;\[\begin{array}...

Question 33

A favourable supply shock would&#10;A)shift the production function up and decrease marginal products at every level of employment.&#10;B)shift the production function down and decrease marginal products at every level of employment.&#10;C)shift the production function down and increase marginal products at every level of employment.&#10;D)shift the production function up and increase marginal products at every level of employment.&#10;

Accepted Answer

The answer of A favourable supply shock would&#10;A)shift the production...

Question 34

An adverse supply shock would&#10;A)shift the production function up and decrease marginal products at every level of employment.&#10;B)shift the production function down and decrease marginal products at every level of employment.&#10;C)shift the production function down and increase marginal products at every level of employment.&#10;D)shift the production function up and increase marginal products at every level of employment.&#10;

Accepted Answer

The answer of An adverse supply shock would&#10;A)shift the production...

Question 35

A supply shock that reduces total factor productivity directly affects which term in the production function Y = AF(K,N)?&#10;A)A&#10;B)F&#10;C)K&#10;D)N&#10;

Accepted Answer

The answer of A supply shock that reduces total factor...

Question 36

A decrease in the real wage would result in a&#10;A)movement along the labour demand curve,causing an increase in the number of workers hired by the firm.&#10;B)shift of the labour demand curve,causing an increase in the number of workers hired by the firm.&#10;C)movement along the labour demand curve,causing a decrease in the number of workers hired by the firm.&#10;D)shift of the labour demand curve,causing a decrease in the number of workers hired by the firm.&#10;

Accepted Answer

The answer of A decrease in the real wage would...

Question 37

Which of the following statements is true?&#10;A)Changes in the total capital stock of the economy and in the amount of labour that firms employ occur quickly.&#10;B)Changes in the total capital stock of the economy and in the amount of labour that firms employ occur slowly.&#10;C)Changes in the total capital stock of the economy occur slowly,while changes in the amount of labour that firms employ occur quickly.&#10;D)Changes in the total capital stock of the economy occur quickly,while changes in the amount of labour that firms employ occur slowly.&#10;

Accepted Answer

The answer of Which of the following statements is true?&#10;A)Changes...

Question 38

Your boss wants to know if you should lay off any workers.You answer that you should lay off workers if the&#10;A)marginal revenue product of labour is greater than the nominal wage rate.&#10;B)marginal product of labour is greater than or equal to the real wage rate.&#10;C)marginal revenue product of labour is equal to the nominal wage rate.&#10;D)marginal product of labour is less than the real wage rate.&#10;

Accepted Answer

The answer of Your boss wants to know if you...

Question 39

The marginal product of labour (measured in units of output)for New Age Nirvana is given by MPN = A(200 - N)where A measures productivity and N is the number of labour hours used in production.Assume that the price of output is $3 per unit and the demand for labour is 195.What will be the level of productivity if the nominal wage is $30?

A)5
B)10
C)2
D)12

Accepted Answer

The answer of The marginal product of labour (measured in...

Question 40

Expected future real wages would cause&#10;A)the aggregate labour supply to shift left.&#10;B)the aggregate labour demand to shift left.&#10;C)the aggregate labour supply to shift right.&#10;D)the aggregate labour demand to shift right.&#10;

Accepted Answer

The answer of Expected future real wages would cause&#10;A)the aggregate...

Question 41

The marginal product of labour (measured in units of output)for New Age Nirvana is given by MPN = A(200 - N)where A measures productivity and N is the number of labour hours used in production.Assume that the price of output is $3 per unit and the demand for labour is 195.What will be the level of productivity if the nominal wage is $30?

A)5
B)10
C)2
D)12

Accepted Answer

The answer of The marginal product of labour (measured in...

Question 42

A beneficial supply shock increases labour demand.What happens to current employment and the real wage rate?&#10;A)Both employment and the real wage rate would increase.&#10;B)Both employment and the real wage rate would decrease.&#10;C)Employment would increase and the real wage would decrease.&#10;D)Employment would decrease and the real wage would increase.&#10;

Accepted Answer

The answer of A beneficial supply shock increases labour demand.What...

Question 43

A tremendous flood along the St.Lawrence Seaway destroys thousands of factories,reducing the nation's capital stock by 5%.What happens to current employment and the real wage rate?&#10;A)Both employment and the real wage rate would increase.&#10;B)Both employment and the real wage rate would decrease.&#10;C)Employment would increase and the real wage would decrease.&#10;D)Employment would decrease and the real wage would increase.&#10;

Accepted Answer

The answer of A tremendous flood along the St.Lawrence Seaway...

Question 44

A rise in wealth reduces labour supply.What happens to current employment and the real wage rate?&#10;A)Both employment and the real wage rate would increase.&#10;B)Both employment and the real wage rate would decrease.&#10;C)Employment would increase and the real wage would decrease.&#10;D)Employment would decrease and the real wage would increase.&#10;

Accepted Answer

The answer of A rise in wealth reduces labour supply.What...

Question 45

Parliament has just passed a law eliminating all mandatory retirement in Canada.How would you expect this to affect the nation's labour supply curve?&#10;A)The labour supply curve would shift to the right.&#10;B)The labour supply curve would shift to the left.&#10;C)The labour supply curve would be unaffected.&#10;D)The labour demand curve would shift to the right.&#10;

Accepted Answer

The answer of Parliament has just passed a law eliminating...

Question 46

A favourable supply shock,such as a fall in the price of oil,would&#10;A)cause firms to demand less labour at any given real wage.&#10;B)cause the labour demand curve to shift to the left.&#10;C)increase the marginal product of labour.&#10;D)decrease the real wage.&#10;

Accepted Answer

The answer of A favourable supply shock,such as a fall...

Question 47

An adverse supply shock,such as a reduced supply of raw materials,would&#10;A)increase the marginal product of labour.&#10;B)decrease the marginal product of labour.&#10;C)decrease the marginal product of capital,but have no effect on the marginal product of labour.&#10;D)not affect the marginal product of labour.&#10;

Accepted Answer

The answer of An adverse supply shock,such as a reduced...

Question 48

The female participation rate in Canada has been increasing since the 1960s.This implies that,other things being equal,&#10;A)the aggregate labour supply curve has shifted leftward.&#10;B)the aggregate labour supply curve has shifted rightward.&#10;C)the aggregate labour demand curve has shifted leftward.&#10;D)the aggregate labour demand curve has shifted rightward.&#10;

Accepted Answer

The answer of The female participation rate in Canada has...

Question 49

In WORKLAND,the marginal product of labour (MPN)is given by MPN = 100 - N,where N is the amount of labour used,and the labour supply by NS = 10 + 5w + 2T,where w is the real wage and T is a lump-sum tax.What is the equilibrium real wage in WORKLAND,if T = 21?&#10;A)6&#10;B)10&#10;C)8&#10;D)5&#10;

Accepted Answer

The answer of In WORKLAND,the marginal product of labour (MPN)is...

Question 50

An individual's labour supply curve might shift to the left because&#10;A)an increase in the future real wage leads to an increase in the amount of labour supplied.&#10;B)an increase in the current real wage leads to a decrease in the amount of labour supplied.&#10;C)an increase in the future real wage leads to a decrease in the amount of labour supplied.&#10;D)an increase in the current real wage leads to an increase in the amount of labour supplied.&#10;

Accepted Answer

The answer of An individual's labour supply curve might shift...

Question 51

Floods have just ravaged the countryside and cities! You would expect this supply shock to shift the&#10;A)marginal product of labour curve up and to the right,raising the quantity of labour demanded at any given real wage.&#10;B)marginal product of labour curve down and to the left,reducing the quantity of labour demanded at any given real wage.&#10;C)real wage curve up,reducing the quantity of labour demanded at any given real wage.&#10;D)real wage curve down,raising the quantity of labour demanded at any given real wage.&#10;

Accepted Answer

The answer of Floods have just ravaged the countryside and...

Question 52

A technological breakthrough in using photons for computers will increase the productivity of those working with computers a hundredfold.You would expect this breakthrough to shift the&#10;A)marginal product of labour curve up and to the right,raising the quantity of labour demanded at any given real wage.&#10;B)marginal product of labour curve down and to the left,reducing the quantity of labour demanded at any given real wage.&#10;C)labour supply curve up,reducing the quantity of labour demanded at any given real wage.&#10;D)labour supply curve down,raising the quantity of labour demanded at any given real wage.&#10;

Accepted Answer

The answer of A technological breakthrough in using photons for...

Question 53

An individual's labour supply curve might shift to the right because&#10;A)an increase in the future real wage leads to a decrease in the amount of labour supplied.&#10;B)a decrease in wealth leads to an increase in the amount of labour supplied.&#10;C)a decrease in the future real wage leads to a decrease in the amount of labour supplied.&#10;D)an increase in wealth leads to a decrease in the amount of labour supplied.&#10;

Accepted Answer

The answer of An individual's labour supply curve might shift...

Question 54

For the economy of Lower Volta,the MPN is given by MPN = 400 - 0.2N where N is aggregate employment.The aggregate quantity of labour supplied is 500 + 10(1 - t)w where t is the income tax rate and w is the real wage.Assume that the income tax rate is 50%.What is the before-tax real wage?&#10;A)150&#10;B)200&#10;C)250&#10;D)300&#10;

Accepted Answer

The answer of For the economy of Lower Volta,the MPN...

Question 55

One's supply of labour depends primarily on&#10;A)one's marginal productivity.&#10;B)the quantity of capital one can work with.&#10;C)the amount of human capital one can supply on the job.&#10;D)the trade-off between labour income and leisure.&#10;

Accepted Answer

The answer of One's supply of labour depends primarily on&#10;A)one's...

Question 56

Suppose the banking industry were to fail,leaving the federal government (through its deposit guarantee programs)to pay for trillions of dollars in losses: they do so by imposing a tax of 50% on all individuals' wealth.What happens to current employment and the real wage rate?&#10;A)Both employment and the real wage rate would increase.&#10;B)Both employment and the real wage rate would decrease.&#10;C)Employment would increase and the real wage would decrease.&#10;D)Employment would decrease and the real wage would increase.&#10;

Accepted Answer

The answer of Suppose the banking industry were to fail,leaving...

Question 57

An individual's labour supply curve slopes upward because&#10;A)an increase in the future real wage leads to an increase in the amount of labour supplied.&#10;B)an increase in the current real wage leads to a decrease in the amount of labour supplied.&#10;C)an increase in the future real wage leads to a decrease in the amount of labour supplied.&#10;D)an increase in the current real wage leads to an increase in the amount of labour supplied.&#10;

Accepted Answer

The answer of An individual's labour supply curve slopes upward...

Question 58

If there is an adverse supply shock,&#10;A)the labour demand curve would shift leftward and,for any real wage,firms would demand more labour.&#10;B)the labour demand curve would shift leftward and,for any real wage,firms would demand less labour.&#10;C)the labour demand curve would shift rightward and,for any real wage,firms would demand more labour.&#10;D)the labour demand curve would shift rightward and,for any real wage,firms would demand less labour.&#10;

Accepted Answer

The answer of If there is an adverse supply shock,&#10;A)the...

Question 59

A new productivity breakthrough in computer technology is announced;as a result,the marginal product of labour will double next year.What happens to current employment and the real wage rate?&#10;A)Both employment and the real wage rate would increase.&#10;B)Both employment and the real wage rate would decrease.&#10;C)Employment would increase and the real wage would decrease.&#10;D)Employment would decrease and the real wage would increase.&#10;

Accepted Answer

The answer of A new productivity breakthrough in computer technology...

Question 60

Parliament has just passed a law allowing more immigration of young workers into Canada.How would you expect this to affect the nation's labour supply curve?&#10;A)The labour supply curve would shift to the right.&#10;B)The labour supply curve would shift to the left.&#10;C)The labour supply curve would be unaffected.&#10;D)The labour demand curve would shift to the right.&#10;

Accepted Answer

The answer of Parliament has just passed a law allowing...

Question 61

An increase in labour participation rate will lead to&#10;A)a right shift in labour supply.&#10;B)a left shift in labour supply.&#10;C)a right shift in labour demand.&#10;D)a left shift in labour demand.&#10;

Accepted Answer

The answer of An increase in labour participation rate will...

Question 62

A decrease in the real wage will cause an individual to increase his or her supply of labour if&#10;A)the substitution effect is greater than the income effect.&#10;B)the income effect is greater than the substitution effect.&#10;C)the substitution effect is positive and the income effect is negative.&#10;D)the substitution effect is equal to the income effect.&#10;

Accepted Answer

The answer of A decrease in the real wage will...

Question 63

The city of Hope has a labour force of 1000.Twenty people lose their jobs each month and remain unemployed for exactly one month before finding jobs.On January 1,May 1,and September 1 of each year,50 people lose their jobs for a period of four months before finding new jobs.What is the unemployment rate in any given month?&#10;A)2%&#10;B)3%&#10;C)5%&#10;D)7%&#10;

Accepted Answer

The answer of The city of Hope has a labour...

Question 64

Frictional unemployment arises when&#10;A)unskilled or low-skilled workers find it difficult to obtain desirable,long-term jobs.&#10;B)labour must be reallocated from industries that are shrinking to areas that are growing.&#10;C)workers must search for suitable jobs and firms must search for suitable workers.&#10;D)output and employment are below full-employment levels.&#10;

Accepted Answer

The answer of Frictional unemployment arises when&#10;A)unskilled or low-skilled workers...

Deck 3: Productivity, output, and Employment