Exam 3: Productivity, Output, and Employment

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?

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

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?

What is the employment ratio (in percentage terms) if there are 17 million people employed, 2.5 million people unemployed, and 3.5 million not in the labour force?

A decrease in the real wage would result in a

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.

Suppose the economy's production function is Y = AK^0.3N^0.7. When K = 1000, N = 50, and A = 15, what is Y?

The recent rise in oil price most likely will not cause recession in Canada, because

An individual's labour supply curve slopes upward because

Which of the following statements is true?

A profit-maximizing firm would hire more employees if

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

An increase in the real wage would result in a

Take an economy where in 2001 real GDP is 4861.4, the capital stock is 13,806.2 and employment is 118.4 (in millions of workers). In 2002 the numbers were: real GDP 4986.3, capital stock 14,040.8, employment 119.2. Suppose the production function in both years is Y = AK^0.25N0.75. a. Calculate total factor productivity for 2001 and 2002. b. How much did total factor productivity grow from 2001 to 2002? c. Calculate the percent increase in real output between 2001 and 2002. d. Suppose tax incentives had raised the capital stock in 2002, making it 10% higher, at 15,444.9. If employment didn't change, what would have been the percent increase in real output between 2001 and 2002? e. Instead of the increase in the capital stock in part d, suppose employment was 10% higher in 2002, making it 131.1. With the capital stock fixed at 14,040.8, what would have been the increase in real output between 2001 and 2002?

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?

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

An adverse supply shock, such as a reduced supply of raw materials, would

The supply of labour depends primarily on

A favourable supply shock, such as a fall in the price of oil, would

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?