Solved

-The First Table Above Gives the Labor Demand and Labor

Question 332

Essay

 Real wage rate  (2005 dollars)  Labor demand  (billions of  hours per  year)  Labor supply  (billions of  hours per  year) 5360260103252751530030020280330\begin{array} { | c | c | c | } \hline \begin{array} { c } \text { Real wage rate } \\\text { (2005 dollars) }\end{array} & \begin{array} { c } \text { Labor demand } \\\text { (billions of } \\\text { hours per } \\\text { year) }\end{array} & \begin{array} { c } \text { Labor supply } \\\text { (billions of } \\\text { hours per } \\\text { year) }\end{array} \\\hline 5 & 360 & 260 \\\hline 10 & 325 & 275 \\\hline 15 & 300 & 300 \\\hline 20 & 280 & 330 \\\hline\end{array}
 Employment  (billions of  hours per  year)  Real GDP  (trillions of  2005 dollars) 1002.02003.03003.84004.4\begin{array} { |c | c | } \begin{array} { c } \text { Employment } \\\text { (billions of } \\\text { hours per } \\\text { year) }\end{array} & \begin{array} { c } \text { Real GDP } \\\text { (trillions of } \\\text { 2005 dollars) }\end{array} \\\hline 100 & 2.0 \\\hline 200 & 3.0 \\\hline 300 & 3.8 \\\hline 400 & 4.4 \\\hline\end{array}
-The first table above gives the labor demand and labor supply schedules for a nation.The second table gives its production function.
a) What is the equilibrium real wage rate and the level of employment?
b) What is potential GDP?
If you cannot determine a precise amount,give the range in which potential GDP must lie.

Correct Answer:

verifed

Verified

a)The equilibrium real wage rate is $15 ...

View Answer

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents