Multiple Choice Questions
tomorrow night
1.To analyze aggregate productivity, economists typically assume:
a.That the hours each person works varies with the wage rate.
b.That all of the capital and labor in the economy are fully utilized.
c.That output can increa only if inputs have become more productive.
d.All of the abov
e.
e.None of the above.
2.The output an economy can produce with one unit of capital and one unit of labor is:
a.Commonly referred to as labor productivity.
b.Indicated by the A variable in the production function.
c. A variable that depends on how many units of capital and labor are available.
d.All of the abov
e.
e.None of the above.
3.Which of the following is true about total factor productivity (TFP)?挥着翅膀的女孩 歌词
a.It can be measured just like capital and labor.multimeter
元宵节英语b.It cannot be directly measured so it has to be calculated from given values of capital, labor and
output.
c.While it cannot be measured directly, it has an exponent of 0.3 in the Cobb-Douglas production
function.
d.While it cannot be measured directly, it has an exponent of 0.7 in the Cobb-Douglas production
function.
e.None of the above.
4.Suppo than an economy has the production function Y = AK0.3L0.7 where Y equals $12 trillion, capital K is
$27 trillion, and labor L is 64 million workers. Given this information, what is the clost approximation of total factor productivity A?
a.less than 0.01
红磷在空气中燃烧的现象b.around 0.25
d.clo to 0.4
5.What do you think would be the production function’s single best prescription for low-income count
ries to
catch up with to high-income countries?
a.To increa their labor force.
b.To ask help of the rich countries.
大学四级成绩查询官网c.To increa their stock of capital.
d.To find more efficient ways to allocate and u capital and labor.
e.None of the above.
6. A ten percent increa in total factor productivity will increa:
a.Economic output by ten percent.
b.The marginal product of labor (MPL) by ten percent.
c.The marginal product of capital (MPK) by ten percent.
d.All of the abov
e.
e.None of the above.
7.The marginal product of labor indicates ________. Therefore the MPL curve is also ________.
a.The quantity of labor supplied for a given wage; the supply curve of labor.
b.The quantity of labor demanded for a given wage; the demand curve of labor.
c.The quantity of labor supplied for a given wage; the equilibrium price of labor.
d.The quantity of labor demanded for a given wage; the equilibrium price of labor.
e.None of the above.
8.Equilibrium market prices for capital and labor are $10 and $8, respectively. Then, the economy experiences
one or more supply shocks, so that the marginal product of capital is $12, and the marginal product of labor is $9. Assuming that the available quantities of capital and labor are fixed, which of the following is (are) likely to decrea as the economy approaches its new equilibrium?
a.Economic profits.
b.Total economic output.
c.Real rental price of capital.
d.The quantity of capital in us
e.
e.None of the above.
Discussion Questions
1.What relationship does the aggregate production function portray? Which of the production function’s variables美丽中国英文版
xianmu
are endogenous and which are exogenous?
The aggregate production function reprents the relationship between the quantities of inputs that go into the production process and the output that is produced with tho inputs.
In the production function Y = F(K,L), output (Y) is an endogenous variable who value is explained by the production function while the capital (K) and labor (L) inputs ud in production are the exogenous variables that determine or explain the level of output produced.
2.Explain how an equilibrium factor price is established in a factor market if there is either an excess demand for
the factor or an excess supply of the factor.
Equilibrium occurs in a factor market when the quantity of the factor demanded by firms equals the quantity of the factor its owners offer for sale. The factor price at which this condition is met is the equilibrium price of the factor. When there is an excess demand, firms want to hire more of the factor than owners of the factor offer for sale. This occurs when the factor’s price is below the equilibrium price. Firms’ competition for the factor drives up its price, which eliminates the excess demand. If the
price of the factor is above the equilibrium price, the quantity of a factor demanded is less than the quantity offered for sale and there is an excess supply of the factor. In this ca, factor owners compete against one another and drive the factor price down. So excess demand and excess supply in a factor market cau the factor’s price to move toward its equilibrium value.
地址翻译3.What determines the distribution of national income between payments to labor and payments to capital?
Assuming that labor and capital inputs are hired in perfectly competitive factor markets, national income is divided between labor and capital with the payments to each input determined by the input’s marginal product. Support for the Cobb-Douglas production function comes from evidence that the shares of national income going to labor and capital remain constant over time, as it predicts, regardless of the level of national income.
4.Suppo an economy has total income of $8 trillion, where total labor income equals $6 trillion and capital
income equals $2 trillion. Which are the values of the exponents on labor and capital using a Cobb-Douglas production function?
圣诞老人英语
A Cobb-Douglas production function us the labor income and capital income shares of total income as
the exponents on labor and capital respectively. In this ca, the labor income share is 0.75, and the capital income share is 0.25. This economy could be reprented by the following production function:
Y = F(K, L) = AK0.25L0.75
Analytical Questions
The questions should be answered bad on the standard models of analysis developed in class.
The information in the various parts of the question is quential and cumulative.
