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- “An increase in the income tax rate (fiscal policy) will have no impact on the level of output or prices in the long run.” True or False? ExplainThe following graph illustrates the market for cashews. It plots the monthly supply of cashews and the monthly demand for cashews. Suppose a stretch of unseasonably good weather occurs, allowing cashew growers to produce more cashews per hectare. Show the effect this shock has on the market for cashews by shifting the demand curve, supply curve, or both. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. PRICE (Dollars per ton) 30 24 18 12 6 0 0 12 24 36 Demand QUANTITY (Thousands of tons) Supply 48 60 Demand Supply ? A number of the growers are concerned about the price decrease initiated by the stretch of favorable weather conditions, as they believe it will lead to decreased revenue. Using elasticities, you will be able to determine whether this price change will lead to a rise or fall in total revenue in this market.In the U.S., when the unemployment rate is around 9%, this indicates a) None of the choices are correct b) the U.S. economy is in a major recession c) that we have higher unemployment than in the Great Depression of the 1930s. d) the U.S. economy is booming and everyone who wants a job can easily find one. e) the U.S. economy is at full employment
- 11. Suppose that the production function is Y=K^(0.5) N^(0.5). With this production function the marginal product of labor is MPN=0.5K^(0.5) N^(-0.5). The capital stock is K=100. The labor supply curve is NS=100(w^2), where w is the real wage and NS denotes the quantity of labor supplied. Compute the equilibrium level of employment (N). 12. Consider Question 11 again. Compute the level of full-employment output (Y). Approximate your answer to the next integer. 13. Consider Question # 11 again. Due to a temporary reduction in immigration, the economy's labor supply curve changes to NS=90(w^2). A policy maker suggests that in order to increase full-employment output in response to the reduction in immigration the government might temporarily subsidize the firm's labor cost by paying a fractions of the wage it pays to a worker. That is, if the real wage received by a worker is w, the firm only pays a portion (1-s)w with the remaining sw coming from the government. Compute the subsidy s…While economists measure unemployment at the macroeconomic level, microeconomic forces are often responsible for this macro aggregate. In other words, the tie between microeconomics and macroeconomics is inevitable when discussing the level of unemployment in an economy. Suppose the following graph represents the market for unskilled labor in a fictional economy. These workers typically represent the young, inexperienced, or uneducated part of the labor force and are therefore most effected by changes in the unemployment rate. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graphThe following graph illustrates the market for cashews. It plots the monthly supply of cashews and the monthly demand for cashews. Suppose a stretch of unseasonably good weather occurs, allowing cashew growers to produce more cashews per hectare. Show the effect this shock has on the market for cashews by shifting the demand curve, supply curve, or both. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. PRICE (Dollars perton) 30 24 18 2 6 0 12 36 Supply 24 QUANTITY (Thousands of tons) Demand 48 Total Revenue (Thousands of Dollars) 60 Demand 0 Supply A number of the growers are concerned about the price decrease initiated by the stretch of favorable weather conditions, as they believe it will lead to decreased revenue. Using elasticities, you will be able to determine whether this price change will lead to a rise or fall in total…
- Assume that aggregate demand curve can be expressed by the following function: W = 55 - 3Q, while the aggregate supply curve can be expressed by the following function: W = 5+7Q. Here W denotes wage level in thousand dollar and Q denotes unit of labours in million people. What is labour equilibrium wage level and units of labour?Which of the following would cause prices to fall and real GDP to rise in the short run? A) an increase in workers' wage rate B) a decrease in the capital stock C) an increase in the quantity of labor available D) a higher interest rateSuppose the world price of cotton falls substantially. The demand for labor among cotton-producing firms in Texas will . The demand for labor among textile-producing firms in South Carolina, for which cotton is an input, will . The temporary unemployment resulting from such sectoral shifts in the economy is best described as unemployment. Suppose the government wants to reduce this type of unemployment. Which of the following policies would help achieve this goal? Check all that apply. Taxing the price of placing a resume or posting a job opening on a job-search website Offering recipients of unemployment insurance benefits a cash bonus if they find a new job within a specified number of weeks Improving a widely used job-search website so that it matches workers to job vacancies more effectively
- Consider an imaginary price index, the Undergraduate Price Index (UPI), created to represent the annual purchases made by a typical undergradute. The following table contains information on the market basket for the UPI and the price of each good in 2020, 2021, and 2022. The cost of each good in the basket as well as the basket's total cost are given for 2020. Perform these same calculations for 2021 and 2022, and enter the results in the following table. Streaming services Iced coffees Textbooks Notebooks Energy drinks Total cost Price index Quantity in Basket 1 150 10 8 40 Suppose this price index uses 2020 as the base year. Price (Dollars) 64 Between 2020 and 2021, the UPI increased by 2020 2 80 2 3 Cost (Dollars) 64 300 800 16 120 1,300 100 Price (Dollars) 104 2 85 2 4 2021 Cost (Dollars) In the last row of the table, calculate and enter the value of the UPI for the remaining years. % Between 2021 and 2022, the UPI increased by Price (Dollars) 134 2 105 4 5 % 2022 Cost (Dollars)In the short run one half of the labour force has high skills and one half low skills (in terms of Figure 13.2 this means that the short-run supply curve is vertical at 0.5). The relative demand for the high-skill workers is given by W = 100×0.4×(1− f), where W is the wage premium and f is the fraction that is skilled. The premium is measured in percent. (a) Illustrate the supply and demand curves graphically, and compute the skill premium going to the high-skill workers in the short run by solving the two equations. (b) If demand increases to W = 100 × 0.6 × (1 − f) what is the new premium? Illustrate your answer graphically. Figure 13.2The following graph illustrates the market for cashews. It plots the monthly supply of cashews and the monthly demand for cashews. Suppose a stretch of unseasonably good weather occurs, allowing cashew growers to produce more cashews per hectare. Show the effect this shock has on the market for cashews by shifting the demand curve, supply curve, or both Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther PRICE (Dollars perton) 12 18 Supply Demand QUANTITY (Thousands of tons) 24 30 Demand Supply