Question : 61) Based the production function in the above figure, which : 1238546

61) Based on the production function in the above figure, which of the following is an attainable combination of labor and real GDP?

i.300 billion hours of labor and real GDP of $20 trillion

ii.300 billion hours of labor and real GDP of $8 trillion

iii.100 billion hours of labor and real GDP of $12 trillion

A) i only

B) ii only

C) iii only

D) ii and iii

E) i and ii

62) Suppose that the Australian economy initially uses 50 billion hours of labor to produce $5 trillion of real GDP. If 50 billion more hours are employed and Australia’s real GDP increases by $4 trillion more,

A) Australia’s production function exhibits diminishing returns.

B) Australia’s production function exhibits increasing returns.

C) Australia has an Okun Wedge of $1 trillion.

D) Australia has positive Lucas Wedge.

E) Australia’s production possibility frontier has a positive slope.

63) The real wage rate is the ________ divided by the ________.

A) quantity of labor demanded; quantity of labor supplied

B) nominal wage rate; price level

C) quantity of labor supplied; quantity of labor demanded

D) nominal wage rate; inflation rate

E) equilibrium quantity of employment; potential GDP

64) Suppose the price of a product is $4 and the nominal wage that the firm must pay is $20. Then the firm’s real wage is

A) $20.

B) $80.

C) $5.

D) $0.20.

E) $4.

65) The benefit to the firm of hiring another worker is

A) the nominal wage.

B) the price level.

C) the real wage.

D) the extra output produced by the worker.

E) measured as the height of the production function.

66) The quantity of labor demanded is the labor hours all

A) firms plan to hire at a given real wage rate.

B) firms plan to hire at a given nominal wage rate.

C) employees plan to work at a given real wage rate.

D) employees plan to work at a given nominal wage rate.

E) Both answers A and C are correct.

67) The total labor hours that all the firms in the economy plan to hire during a given time period at one particular real wage rate is the

A) demand for labor.

B) quantity of labor demanded.

C) supply of labor.

D) quantity of labor supplied.

E) quantity of jobs supplied.

68) If the real wage rate decreases from $14.00 per hour to $13.00 per hour, the

A) quantity demanded of labor increases.

B) demand for labor increases.

C) quantity supplied of labor increases.

D) supply of labor increases.

E) equilibrium quantity of employment must decrease.

69) When all other influences on firms’ hiring plans remain the same, the

A) lower the real wage rate, the greater is the quantity of labor supplied

B) higher the real wage rate, the greater is the quantity of labor demanded.

C) lower the real wage rate, the smaller is the quantity of labor demanded.

D) lower the real wage rate, the greater is the quantity of labor demanded.

E) None of the above answers is correct because firms’ hiring decisions depend on how profitable hiring a worker is, which depends on how much added profit the worker can create.

70) The lower the real wage rate, the

A) fewer workers firms can profitably hire.

B) more workers firms can profitably hire.

C) more workers will supply labor.

D) higher the nominal wage rate.

E) larger the quantity of labor supplied.