Question : 8.3   Chapter Figures 1) The figure above shows the U.S. production : 1240953

 

8.3   Chapter Figures

 

 

 

1) The figure above shows the U.S. production function. How would an increase in capital be shown in the figure?

A) an upward shift or rotation of the production function

B) a downward shift or rotation of the production function

C) a movement from point A to point B

D) a movement from point C to point B

E) None of the above because the effects of an increase in capital cannot be shown in the figure.

2) The figure above shows the U.S. production function. How would an increase in unemployment benefits be shown in the figure?

A) a movement from point C to point B

B) a movement from point A to point B

C) an upward shift or rotation of the production function

D) a downward shift or rotation of the production function

E) None of the above because the effects of an increase in unemployment benefits cannot be shown in the figure.

 

3) The figure above shows the U.S. production function. How would an increase in income taxes be shown in the figure?

A) a movement from point C to point B

B) a movement from point A to point B

C) an upward shift or rotation of the production function

D) a downward shift or rotation of the production function

E) None of the above because the effects of an increase in taxes cannot be shown in the figure.

 

4) The figure above shows the U.S. demand for labor curve. If there is a simultaneous increase in the nominal wage rate of 10 percent and a 10 percent increase in the price level, there will be a

A) rightward shift of the demand for labor curve.

B) leftward shift of the demand for labor curve.

C) movement downward along the demand for labor curve from a point such as A to a point such as B.

D) movement upward along the demand for labor curve from a point such as C to a point such as B.

E) None of the above answers is correct because there is no change in the demand for labor curve.

 

5) The figure above shows the U.S. supply of labor curve. If there is a simultaneous increase in the nominal wage rate of 10 percent and a 10 percent increase in the price level, there will be a

A) rightward shift of the supply of labor curve.

B) leftward shift of the supply of labor curve.

C) movement downward along the supply of labor curve from a point such as A to a point such as B.

D) movement upward along the supply of labor curve from a point such as C to a point such as B.

E) None of the above answers is correct because there is no change in the supply of labor curve.

6) The figure above shows the U.S. supply of labor curve. An increase in the income tax rate leads to a

A) rightward shift of the supply of labor curve.

B) movement upward along the supply of labor curve from a point such as C to a point such as B.

C) movement downward along the supply of labor curve from a point such as A to a point such as B.

D) leftward shift of the supply of labor curve.

E) None of the above answers is correct because there is no change in the supply of labor curve.

 

7) The figure above shows the U.S. supply of labor curve. What was the effect of the decline in birth rates during the 1960s and 1970s on the supply of labor curve in the 1980s?

A) a rightward shift of the supply of labor curve

B) The supply of labor curve became steeper.

C) a movement downward along the supply of labor curve from a point such as A to a point such as B

D) a leftward shift of the supply of labor curve

E) None of the above answers is correct because there was no change in the supply of labor curve.

 

8.4   Integrative Questions

 

1) If the government increases unemployment benefits, then the labor

A) demand curve shifts rightward.

B) demand curve shifts leftward.

C) supply curve shifts rightward.

D) supply curve shifts leftward.

E) Both answers B and D are correct.

2) If the government increases unemployment benefits, then the equilibrium amount of employment ________ and potential GDP ________.

A) increases; increases

B) increases; decreases

C) decreases; increases

D) decreases; decreases

E) does not change; does not change

 

3) If the government raises income taxes, then the labor

A) demand curve shifts rightward.

B) demand curve shifts leftward.

C) supply curve shifts rightward.

D) supply curve shifts leftward.

E) Both answers B and D are correct.

 

4) If the government raises income taxes, then the equilibrium amount of employment ________ and potential GDP ________.

A) increases; increases

B) increases; decreases

C) decreases; increases

D) decreases; decreases

E) does not change; does not change

5) An increase in the time spent on job search

A) decreases potential GDP.

B) decreases the unemployment rate.

C) decreases the labor force participation rate.

D) decreases the demand for labor.

E) decreases the real wage rate.

 

6) The smaller the extent of job rationing, the

A) lower potential GDP.

B) lower the unemployment rate.

C) lower the labor force participation rate.

D) higher the labor supply.

E) higher the real wage rate.