Problem 1 Consider the simple (one-period) production model. The production function is Cobb-Douglas, exhibits constant returns to scale, and the exponent on capital equals 0.25. Draw a diagram for the labor market. Label the initial equilibrium (year 2010) as point A and the final equilibrium (year 2020) as point B. Complete the blanks below: as a result of the flooding the labor supply and the labor demand Shifts to right; Shifts to the left Stays constant; Shifts to the right None of the other options Stays constant; Shifts to the left Shifts to the left; Stays constant
Problem 1 Consider the simple (one-period) production model. The production function is Cobb-Douglas, exhibits constant returns to scale, and the exponent on capital equals 0.25. Draw a diagram for the labor market. Label the initial equilibrium (year 2010) as point A and the final equilibrium (year 2020) as point B. Complete the blanks below: as a result of the flooding the labor supply and the labor demand Shifts to right; Shifts to the left Stays constant; Shifts to the right None of the other options Stays constant; Shifts to the left Shifts to the left; Stays constant
Chapter1: Making Economics Decisions
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Transcribed Image Text:Problem 1
Consider the simple (one-period) production model. The production function is Cobb-Douglas, exhibits
constant returns to scale, and the exponent on capital equals 0.25.

Transcribed Image Text:Draw a diagram for the labor market. Label the initial equilibrium (year 2010) as
point A and the final equilibrium (year 2020) as point B. Complete the blanks
below: as a result of the flooding the labor supply
and the
labor demand
Shifts to right; Shifts to the left
Stays constant; Shifts to the right
None of the other options
Stays constant; Shifts to the left
Shifts to the left; Stays constant
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