Exam 3: Productivity, Output, and Employment

Suppose a firm's hourly marginal product of labor is given by MPN = A (200 - N).(a) If A = 0.2 and the real wage rate is $10 per hour,how much labor will the firm want to hire? (b) Suppose the real wage rate rises to $20 per hour.How much labor will the firm want to hire? (c) With the real wage rate at $10 per hour,how much labor will the firm want to hire if A rises to 0.5?

The marginal product of labor

One reason that firms hire labor at the point where w = MPN is

The ________ is the number of unemployed divided by the labor force and the ________ is the number of employed divided by the adult population.

The labor force participation rate is the percentage of the adult population that is

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. (a)What is the unemployment rate in any given month? (b)How many unemployment spells are there in a year? (c)What is the average duration of an unemployment spell? (d)On any given date,how many people are undergoing short spells,and how many are undergoing long spells?

What is the unemployment rate if there are 150 million people employed,25 million people unemployed,and 25 million not in the labor force?

According to Okun's law,an increase in the unemployment rate will cause ________ in the level of employment and ________ in the level of output.

What is the participation rate if there are 125 million people in the labor force,100 million people employed,and 25 million not in the labor force?

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

Assume that the full-employment level of output is $5000 billion and the natural unemployment rate is 5%.Suppose the current unemployment rate is 8%.What would be the current level of output according to Okun's law (when the Okun's law coefficient is 2)?

In the U.S.economy in 1991,real GDP was 4861.4 (in billions of 1987 dollars),the capital stock was 13,806.2 (in billions of 1987 dollars),and employment was 118.4 (in millions of workers).In 1992 the numbers were: real GDP 4986.3,capital stock 14,040.8,employment 119.2.Suppose the production function in both years is Y = A . (a)Calculate total factor productivity for 1991 and 1992. (b)How much did total factor productivity grow from 1991 to 1992? (c)Calculate the percent increase in real output between 1991 and 1992. (d)Suppose tax incentives had raised the capital stock in 1992,making it 10% higher,to 15,444.9.If employment didn't change,what would have been the percent increase in real output between 1991 and 1992? (e)Instead of the increase in the capital stock in part d,suppose employment was 10% higher in 1992,making it 131.1.With the capital stock fixed at 14,040.8,what would have been the increase in real output between 1991 and 1992?

Zowie! Surfboards has the following production function. If surfboards sell for $30 and the nominal wage rate is $200,how many workers should the firm employ?

A decrease in the number of workers hired by a firm could result from

How would each of the following events affect the level of employment and the real wage rate? Explain which curves in the labor market diagram would be affected and show your work. (a)The stock market falls sharply. (b)A war destroys a substantial amount of a country's physical capital. (c)A new law reduces immigration of workers into the country.

If Y = A × N × (75 + K/N),where K = 1000,N = 20,and A = 10,what happens if K doubles and N doubles?

The marginal product of labor (measured in units of output)for Expando Corp.is given by MPN = A(400 - N) Where A measures productivity and N is the number of labor hours used in production.Suppose the price of output is $3 per unit and A = 2.0.What will be the demand for labor if the nominal wage is $18?

The Widget Company has the following production function. If widgets sell for $6 each and the wage rate is $33,how many workers will the company hire?

An increase in the number of workers hired by a firm could result from