Question 1

A skill-biased technological change

Accepted Answer

A) increases the MPN of unskilled workers,but reduces the MPN of skilled workers. 
B) changes the MPN of unskilled and skilled workers proportionately. 
C) increases the MPN of skilled workers,but reduces the MPN of unskilled workers. 
D) is a main cause of unemployment. 
A) increases the MPN of unskilled workers,but reduces the MPN of skilled workers. 
B) changes the MPN of unskilled and skilled workers proportionately. 
C) increases the MPN of skilled workers,but reduces the MPN of unskilled workers. 
D) is a main cause of unemployment.

Question 2

Suppose a firm's hourly marginal product of labour is given by MPN = A(200 - N).
a.If A = .2 and the real wage is $10 per hour,how much labour will the firm want to hire?
b.Suppose the real wage rate rises to $20 per hour.How much labour will the firm want to hire?
c.With the real wage rate at $10 per hour,how much labour will the firm want to hire if A rises to .5?

Accepted Answer

a.The firm will hire labour such that w

Question 3

What two factors should you equate in deciding how many workers to employ?

Accepted Answer

A) the marginal product of labour and the marginal product of capital 
B) the marginal product of labour and the real wage rate 
C) the marginal product of labour and the real interest rate 
D) the marginal product of capital and the real wage rate 
A) the marginal product of labour and the marginal product of capital 
B) the marginal product of labour and the real wage rate 
C) the marginal product of labour and the real interest rate 
D) the marginal product of capital and the real wage rate

Question 4

Your boss has told you that because of a decrease in the demand for the designer baby food your firm produces,he will have to cut everyone's salary next year to avoid layoffs.In response to this news you would

Accepted Answer

A) increase your labour supply because the income effect would be equal to the substitution effect. 
B) decrease your labour supply because the substitution effect would be stronger than the income effect. 
C) increase your labour supply because there would be an income effect,but no substitution effect. 
D) decrease your labour supply because there would be a substitution effect,but no income effect. 
A) increase your labour supply because the income effect would be equal to the substitution effect. 
B) decrease your labour supply because the substitution effect would be stronger than the income effect. 
C) increase your labour supply because there would be an income effect,but no substitution effect. 
D) decrease your labour supply because there would be a substitution effect,but no income effect.

Question 5

Which one of the following events does NOT cause a shift in the aggregate labour demand curve?

Accepted Answer

A) A rise of labour productivity 
B) An increase in capital stock 
C) An increase in the number of robots taking away workers' jobs 
D) An increase in oil prices 
A) A rise of labour productivity 
B) An increase in capital stock 
C) An increase in the number of robots taking away workers' jobs 
D) An increase in oil prices

Question 6

Technological progress is measured by

Accepted Answer

A) average labour productivity. 
B) marginal product of labour. 
C) total factor productivity. 
D) marginal product of capital. 
A) average labour productivity. 
B) marginal product of labour. 
C) total factor productivity. 
D) marginal product of capital.

Question 7

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?

Accepted Answer

A) Both employment and the real wage rate would increase. 
B) Both employment and the real wage rate would decrease. 
C) Employment would increase and the real wage would decrease. 
D) Employment would decrease and the real wage would increase. 
A) Both employment and the real wage rate would increase. 
B) Both employment and the real wage rate would decrease. 
C) Employment would increase and the real wage would decrease. 
D) Employment would decrease and the real wage would increase.

Question 8

A rise in wealth reduces labour supply.What happens to current employment and the real wage rate?

Accepted Answer

A) Both employment and the real wage rate would increase. 
B) Both employment and the real wage rate would decrease. 
C) Employment would increase and the real wage would decrease. 
D) Employment would decrease and the real wage would increase. 
A) Both employment and the real wage rate would increase. 
B) Both employment and the real wage rate would decrease. 
C) Employment would increase and the real wage would decrease. 
D) Employment would decrease and the real wage would increase.

Question 9

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

Accepted Answer

A) marginal product of labour curve up and to the right,raising the quantity of labour demanded at any given real wage. 
B) marginal product of labour curve down and to the left,reducing the quantity of labour demanded at any given real wage. 
C) labour supply curve up,reducing the quantity of labour demanded at any given real wage. 
D) labour supply curve down,raising the quantity of labour demanded at any given real wage. 
A) marginal product of labour curve up and to the right,raising the quantity of labour demanded at any given real wage. 
B) marginal product of labour curve down and to the left,reducing the quantity of labour demanded at any given real wage. 
C) labour supply curve up,reducing the quantity of labour demanded at any given real wage. 
D) labour supply curve down,raising the quantity of labour demanded at any given real wage.

Question 10

An individual's labour supply curve might shift to the left because

Accepted Answer

A) an increase in the future real wage leads to an increase in the amount of labour supplied. 
B) an increase in the current real wage leads to a decrease in the amount of labour supplied. 
C) an increase in the future real wage leads to a decrease in the amount of labour supplied. 
D) an increase in the current real wage leads to an increase in the amount of labour supplied. 
A) an increase in the future real wage leads to an increase in the amount of labour supplied. 
B) an increase in the current real wage leads to a decrease in the amount of labour supplied. 
C) an increase in the future real wage leads to a decrease in the amount of labour supplied. 
D) an increase in the current real wage leads to an increase in the amount of labour supplied.

Question 11

The less permanent an employee perceives an increase in her real wages to be

Accepted Answer

A) the smaller the income effect is and the more likely it is that the quantity of labour supplied will be increased. 
B) the smaller the income effect is and the more likely it is that the quantity of labour supplied will be reduced. 
C) the smaller the substitution effect is and the more likely it is that the quantity of labour supplied will be increased. 
D) the smaller the substitution effect is and the more likely it is that the quantity of labour supplied will be reduced. 
A) the smaller the income effect is and the more likely it is that the quantity of labour supplied will be increased. 
B) the smaller the income effect is and the more likely it is that the quantity of labour supplied will be reduced. 
C) the smaller the substitution effect is and the more likely it is that the quantity of labour supplied will be increased. 
D) the smaller the substitution effect is and the more likely it is that the quantity of labour supplied will be reduced.

Question 12

Suppose the economy's production function is Y = AK⁰.³ᴺ⁰.⁷.When K = 1000,N = 50,and A = 15,what is Y?

Accepted Answer

A) 1842 
B) 6106 
C) 750,000 
D) 123 
A) 1842 
B) 6106 
C) 750,000 
D) 123

Question 13

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?

Accepted Answer

A) Both employment and the real wage rate would increase. 
B) Both employment and the real wage rate would decrease. 
C) Employment would increase and the real wage would decrease. 
D) Employment would decrease and the real wage would increase. 
A) Both employment and the real wage rate would increase. 
B) Both employment and the real wage rate would decrease. 
C) Employment would increase and the real wage would decrease. 
D) Employment would decrease and the real wage would increase.

Question 14

An increase in the real wage rate will cause

Accepted Answer

A) the labour supply curve to shift to the right. 
B) the labour demand curve to shift to the left. 
C) both the labour supply curve and the labour demand curve to shift to the right. 
D) a movement along the labour demand curve. 
A) the labour supply curve to shift to the right. 
B) the labour demand curve to shift to the left. 
C) both the labour supply curve and the labour demand curve to shift to the right. 
D) a movement along the labour demand curve.

Question 15

The skilled-bias technological change means that

Accepted Answer

A) the recent technological change has raised the productivity of highly trained or educated workers more than that of the less skilled. 
B) the recent technological change has raised the real wage of highly trained or educated workers more than that of the less skilled. 
C) the recent technological change has raised the real wage of women more than that of men. 
D) all of the above. 
A) the recent technological change has raised the productivity of highly trained or educated workers more than that of the less skilled. 
B) the recent technological change has raised the real wage of highly trained or educated workers more than that of the less skilled. 
C) the recent technological change has raised the real wage of women more than that of men. 
D) all of the above.

Question 16

Which of the following statements is true?

Accepted Answer

A) The marginal product of capital is positive as long as the production function's slope is positive. 
B) The marginal product of capital is positive as long as the production function's slope is zero. 
C) The marginal product of capital is negative as long as the production function's slope is positive. 
D) The marginal product of capital is negative as long as the production function's slope is zero. 
A) The marginal product of capital is positive as long as the production function's slope is positive. 
B) The marginal product of capital is positive as long as the production function's slope is zero. 
C) The marginal product of capital is negative as long as the production function's slope is positive. 
D) The marginal product of capital is negative as long as the production function's slope is zero.

Question 17

The marginal revenue product of labour (MRPN)is

Accepted Answer

A) less than the wage rate. 
B) greater than the wage rate. 
C) the amount of benefit of employing an additional worker in terms of the total value of output produced. 
D) the amount of benefit of employing an additional worker in terms of the extra output produced. 
A) less than the wage rate. 
B) greater than the wage rate. 
C) the amount of benefit of employing an additional worker in terms of the total value of output produced. 
D) the amount of benefit of employing an additional worker in terms of the extra output produced.

Question 18

The supply of labour depends primarily on

Accepted Answer

A) the marginal productivity of workers in the economy. 
B) the quantity of capital that workers can work with. 
C) the amount of human capital that workers can supply on the job. 
D) the trade-off between labour income and leisure. 
A) the marginal productivity of workers in the economy. 
B) the quantity of capital that workers can work with. 
C) the amount of human capital that workers can supply on the job. 
D) the trade-off between labour income and leisure.

Question 19

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?

Accepted Answer

A) 2% 
B) 3% 
C) 5% 
D) 7% 
A) 2% 
B) 3% 
C) 5% 
D) 7%

Question 20

How would each of the following events affect Cheryl Shirker's supply of labour?
a.Cheryl's firm announces a reorganization plan in which she will get a big promotion and raise in six months.
b.Cheryl's speculative investment in plutonium futures pays off big,netting her a profit of $300 thousand.
c.Cheryl's father,who had planned to leave her a large bequest,must spend all his wealth on medical bills after a prolonged illness.

Accepted Answer

a.The higher future real wage

A skill-biased technological change

What two factors should you equate in deciding how many workers to employ?

Your boss has told you that because of a decrease in the demand for the designer baby food your firm produces,he will have to cut everyone's salary next year to avoid layoffs.In response to this news you would

Which one of the following events does NOT cause a shift in the aggregate labour demand curve?

Technological progress is measured by

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?

A rise in wealth reduces labour supply.What happens to current employment and the real wage rate?

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

An individual's labour supply curve might shift to the left because

The less permanent an employee perceives an increase in her real wages to be

Suppose the economy's production function is Y = AK⁰.³ᴺ⁰.⁷.When K = 1000,N = 50,and A = 15,what is Y?

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?

An increase in the real wage rate will cause

The skilled-bias technological change means that

Which of the following statements is true?

The marginal revenue product of labour (MRPN)is

The supply of labour depends primarily on

Introduction to Macroeconomics

The Measurement and Structure of the Canadian Economy

Consumption, saving, and Investment

Saving and Investment in the Open Economy

Long-Run Economic Growth

The Asset Market, money, and Prices

Business Cycles

The Is-Lm-Fe Model: a General Framework for Macroeconomic Analysis

Exchange Rates, business Cycles, and Macroeconomic Policy

Classical Business Cycle Analysis: Market-Clearing Macroeconomics

Keynesian Business Cycle Analysis: Non Market Clearing Macroeconomics

Unemployment and Inflation

Monetary Policy and the Bank of Canada

Government Spending and Its Financing

Filters

Exam 3: Productivity, output, and Employment

A skill-biased technological change

What two factors should you equate in deciding how many workers to employ?

Your boss has told you that because of a decrease in the demand for the designer baby food your firm produces,he will have to cut everyone's salary next year to avoid layoffs.In response to this news you would

Which one of the following events does NOT cause a shift in the aggregate labour demand curve?

Technological progress is measured by

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?

A rise in wealth reduces labour supply.What happens to current employment and the real wage rate?

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

An individual's labour supply curve might shift to the left because

The less permanent an employee perceives an increase in her real wages to be

Suppose the economy's production function is Y = AK⁰.³ᴺ⁰.⁷.When K = 1000,N = 50,and A = 15,what is Y?

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?

An increase in the real wage rate will cause

The skilled-bias technological change means that

Which of the following statements is true?

The marginal revenue product of labour (MRPN)is

The supply of labour depends primarily on

Introduction to Macroeconomics

The Measurement and Structure of the Canadian Economy

Consumption, saving, and Investment

Saving and Investment in the Open Economy

Long-Run Economic Growth

The Asset Market, money, and Prices

Business Cycles

The Is-Lm-Fe Model: a General Framework for Macroeconomic Analysis

Exchange Rates, business Cycles, and Macroeconomic Policy

Classical Business Cycle Analysis: Market-Clearing Macroeconomics

Keynesian Business Cycle Analysis: Non Market Clearing Macroeconomics

Unemployment and Inflation

Monetary Policy and the Bank of Canada

Government Spending and Its Financing

Filters