The tables set out information about the economy of Athabasca Table 1 Production

Question

The tables set out information about the economy of Athabasca Table 1 Production Function Real GDP (millions of 2009 dollars) 105 205 300 390 475 What is the quantity of labor employed, potential GDP, and the market real wage Labor hours (millions) rate in Athabasca? The quantity of labor employed is Potential GDP is million. The real wage rate is San hour 10 15 20 25 million hours Table 2 Labor Market Real wage rate (2009 dollars Quantity of labor demanded Quantity of labor supplied per hour) (millions of hours per year) 20 19 18 17 10 15 20 25 20 15 10 Enter your answer in each of the answer boxes

Explanation / Answer

Quantity of labor demanded equals quantity of labor supplied corresponding to wage rate of $19 per hour.

This quantity is 15 million labor hours per year.

So,

The quantity of labor employed is 15 million hours.

Real GDP corresponding to 15 million labor hours is $300 million.

So,

The Potential GDP is $300 million.

The real wage rate is $19 an hour.

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