Exam #1 Spring 2008 solutions

# Exam #1 Spring 2008 solutions - Name SID Discussion Section...

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Spring 2008 (Exam #1) Econ 100B 1 of 8 Name: ____________________________ SID : ____________________________ Discussion Section: ________________ Economic 100B Macroeconomic Analysis Professor Steven Wood Spring 2008 Exam #1 ANSWERS Please sign the following oath: The answers on this test are entirely my own work. I neither gave nor received any aid while taking this test. I will not discuss the questions on this test until after 5:00 p.m. on February 21, 2008. ______________________ Signature Any test turned in without a signature indicating that you have taken this oath will be assigned a grade of zero. Graph Instructions When drawing diagrams, the following rules apply: 1. Completely , clearly and accurately label all axes, lines, curves, and equilibrium points. 2. The original diagram and any equilibrium points MUST be drawn in black or pencil. 3. The first change in any variable, curve, or line and any new equilibrium points MUST be drawn in red. 4. The second change in any variable, curve, or line and any new equilibrium points MUST be drawn in blue. 5. The third change in any variable, curve, or line and any new equilibrium points MUST be drawn in green. Do NOT open this test until instructed to do so. Good Luck!

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Spring 2008 (Exam #1) Econ 100B 3 of 8 A. Multiple Choice Questions . Circle the letter corresponding to the best answer. (3 points each; total of 30 points.) 1. A winter ice storm has paralyzed the entire East Coast, reducing productivity sharply. This supply shock shifts the marginal product of labor curve: a. To the right, raising the quantity of labor demanded at any given real wage rate. b. To the left, reducing the quantity of labor demanded at any given real wage rate. c. To the right, reducing the quantity of labor demanded at any given real wage rate. d. To the left, raising the quantity of labor demanded at any given real wage rate. 2. Research on labor supply generally shows that labor supply: a. Rises in response to a permanent increase in the real wage but falls in response to a temporary increase in the real wage. b. Rises in response to a temporary increase in the real wage but falls in response to a permanent increase in the real wage. c. Rises in response to both a temporary and a permanent increase in the real wage. d. Falls in response to both a temporary and a permanent increase in the real wage. 3. The government announces a tax increase on workers’ wages to take effect in the future. What happens to current employment and the real wage rate?

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• Spring '08
• Wood
• Economics, real wage rate

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