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Suppose the Marginal Product of Labor Is MPN = 200

Question 89

Multiple Choice

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.If a supply shock increases the marginal product of labor by 10 (to MPN = 210 - 0.5 N) ,by how much does employment increase?


A) 0
B) 4
C) 8
D) 16

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