llowing list of events that occur one at a time to work Problems 3 to 6. Middle
ID: 1143315 • Letter: L
Question
llowing list of events that occur one at a time to work Problems 3 to 6. Middle East cuts supplies of oil to the United States. ew York Yankees win the World Series. Use the . The A .US. hour of U.S. labor can produce. labor unions negotiate wage hikes that affect all workers 4 huge scientific breakthrough doubles the output that an additional Migration to the United States increases the working-age population. . Sort the items into four groups: those that change the production function, labor, and those that do not change the production function, the demand for ose that change the demand for labor, those that change the supply of labor, or the supply of labor. Say in which direction each change occurs. 4. Which of the events increase the equilibrium quantity of labor and which 5. Which of the events raise the real wage rate and which of the events lower 6. Which of the events increase potential GDP and which decrease potential decrease the equilibrium quantity of labor? the real wage rate? GDP?Explanation / Answer
3. a. Scientific breakthrough will affect product function it will increase output.
b. Rise in wage rate will affect demand for labour, it will reduce labour demand.
c. Migration of labour to US will affect supply of labour, it will increase supply of labour.
d. Second item will not affect production function, demand for labour and supply of labour.
4. Migration of labour will increase the equilibrium quantity of labour and increase in wage decrease equilibrium quantity of labour.
5. Increase in wage rate will increase the real wage rate and migration of labour to US will decrease the real wage rate.
6. Scientific breakthrough will increase potential GDP by doubling of output and the cut of oil supply will decrease potential GDP by affecting total output adversely.
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