Exam 3: Productivity, Output, and Employment

1)Suppose the marginal product of labor is MPN = 200 - 0.5N Where N is aggregate employment.The aggregate quantity of labor supplied is 300 + 8w,where w is the real wage.What is the equilibrium real wage?

A permanent increase in the real wage rate has a ________ income effect on labor supply than a temporary increase in the real wage,so labor supply is ________ with a permanent wage increase than for a temporary wage increase.

A mathematical expression relating the amount of output produced to quantities of capital and labor utilized is the

Changes in the capital stock occur ________,and changes in the amount of labor that firms employ occur ________.

Suppose the natural rate of unemployment is 5%,with full-employment output of $7000 billion.Use Okun's Law to calculate the level of national output if the unemployment rate is 7%.

The tendency of workers to supply more labor in response to a larger reward for working is called the ________ of a higher real wage on the quantity of labor supplied.

In the production function Y = AF(K,N),total factor productivity is

Economists often treat the economy's capital stock as fixed because

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

A favorable supply shock would

The city of Hope has a labor 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?

Suppose the marginal product of labor in the economy is given by MPN = 0.002(16,000 - N),while the supply of labor is 1000 + 1000w. (a)Find the market-clearing real wage rate and level of employment. (b)What happens to the wage rate and employment if wealth rises,reducing the supply of labor to 500 + 1000w? (c)What happens to the wage rate and employment if after wealth has risen as in part (b), there is a productivity shock that increases the marginal product of labor to MPN = 0.0025(16,000 - N)?

If Jeff's wage rate rises,he decides to work fewer hours.From this,we can infer that

An increase in the real wage would result in a

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

Assuming that the growth rate of full-employment output is 3%,and that the actual unemployment rate fell 2 percentage points in the last year,Okun's Law predicts that output growth rate over the past year was

The two main characteristics of the production function are

Because of diminishing marginal productivity

How many people are unemployed if the employment ratio is 75%,there are 90 million people employed,and there are 20 million people not in the labor force?

A bird flu epidemic causes many people to flee the country,but does not affect labor demand Significantly because almost all the goods produced within the country are exported.What happens to current employment and the real wage rate?