Exam 3: Productivity, output, and Employment

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 that A = 2.0.What will be the demand for labour if the nominal wage is $30?

Your boss wants to know if you should lay off any workers.You answer that you should lay off workers if the

Cyclical unemployment arises when

In the production function Y = AF(K,N),A is

One's supply of labour depends primarily on

Using the labour market model and the labour demand and supply curves,show how the real wage and the equilibrium level of employment are determined.What would happen to the real wage and the unemployment level in an oil-importing country when oil prices fall? Explain.

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?

Firms hire labour at the point where the

Suppose the country of Prescott has the production function Y = AK⁰.²⁵ᴺ⁰.⁷⁵.The following table shows Prescott's macroeconomic data for 2002 and 2003: Year Y K N 2002 2000 1700 70 2003 2100 1785 75 a.By how much did productivity grow between 2002 and 2003? b.If productivity remains constant from 2003 to 2004 and the labour force increases from 75 to 80,how large will the capital stock need to be to produce output of 2200 in 2004?

Which market determines the real wage and employment?

Which of the following represents a supply shock?

Suppose oil prices fall temporarily as oil becomes more plentiful.What impact is this likely to have on the production function,the marginal products of labour and capital,labour demand,employment,and the real wage?

The principle of the diminishing marginal productivity of capital means that

A decrease in the real wage would result in a

The total factor productivity is

Floods have just ravaged the countryside and cities! You would expect this supply shock to shift the

The mathematical expression relating the amount of output produced to quantities of capital and labour utilized is called

An increase in the real wage would result in a

Firms hire labour at the point where

The fact that the production function relating output to capital becomes flatter as we move from left to right means that