Calculate the quantity of labor employed, the real wage rate, and potential GDP. **Economy of Athabasca: Production Function and Labor Market Data**The tables below provide detailed insights into the economy of Athabasca, focusing on the production function and the labor market.**Production Function:**- **Labor Hours (millions):** Represents the total labor input measured in millions of hours.- **Real GDP (millions of 2009 dollars):** Indicates the output of goods and services, adjusted for inflation, measured in millions of 2009 dollars.| Labor Hours (millions) | Real GDP (millions of 2009 dollars) ||------------------------|-------------------------------------|| 0 | 0 || 1 | 10 || 2 | 19 || 3 | 27 || 4 | 34 || 5 | 40 |**Labor Market:**- **Real Wage Rate (2009 dollars per hour):** The wage rate adjusted for inflation, in 2009 dollars per hour.- **Quantity of Labor Demanded (millions of hours per year):** The amount of labor employers are willing to hire at a given wage rate.- **Quantity of Labor Supplied (millions of hours per year):** The amount of labor workers are willing to supply at a given wage rate.| Real Wage Rate (2009 dollars per hour) | Quantity of Labor Demanded (millions of hours per year) | Quantity of Labor Supplied (millions of hours per year) ||----------------------------------------|---------------------------------------------------------|--------------------------------------------------------|| 10 | 1 | 5 || 9 | 2 | 4 || 8 | 3 | 3 || 7 | 4 | 2 || 6 | 5 | 1 |These tables help illustrate the relationship between labor input and economic output, as well as the dynamics of the labor market in terms of wage rates, labor demand, and labor supply.

We will use labor market equilibrium concept to answer this question.Equilibrium Labor is obtained when Quantity of labor demanded equals to Quantity of labor supplied At real wage rate of $8 per hour Quantity of labor demanded is equal to Quantity of labor supplied = 3 millions of hour. No further information is provided on whether the economy is operating at full employment, we assume that the economy is operating at its full potential. Therefore, Real GDP equals to Potential GDP Real GDP for 3 millions hours of labor we have is 27 millions dollars. As discussed, Real GDP equals to Potential GDP = $27 million. Answers: 1) Real Wage Rate = $8 2) Equilibrium quantity of labor = 3 million hours 3) Potential GDP = $27 million.

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Use the information set out in the tables below about the economy of Athabasca. Production function Labor market Real GDP (millions of (millions) 2009 dollars) Real wage rate (2009 dollars labor demanded labor supplied per hour) Labor hours Quantity of Quantity of (millions of hours per year) 10 19 10 2 4 3 27 3 3 4 34 40 7 4

Use the information set out in the tables below about the economy of Athabasca. Production function Labor market Real GDP (millions of (millions) 2009 dollars) Real wage rate (2009 dollars labor demanded labor supplied per hour) Labor hours Quantity of Quantity of (millions of hours per year) 10 19 10 2 4 3 27 3 3 4 34 40 7 4

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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