2010_Econ%20110A%20blanchard%204e%20Ch%206%20HomeworkQuestions

# 2010_Econ%20110A%20blanchard%204e%20Ch%206%20HomeworkQuestions

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Econ 110A Ch 6 Homework Questions Please, do not use a calculator or any other devices such as cell phones or computers. 1. In the wage-setting relation, an increase in the minimum wage ___ the nominal wage. A. increases. B. decreases. C. does not change. 2. The reason for the answer to question 1 is that an increase in the minimum wage strengthens the ____ position in bargaining. A. employers’. B. workers’. C. economy’s. 3. In the price-setting relation with markups, A. P = W. B. P > W. C. P < W. D. P = 1/W. 4. The economy has 100 workers, and they produce 10 units of output. Labor productivity is then A. 10N. B. 10. C. 100. D. 1000. E. .1. 5. At the natural rate of unemployment,

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Unformatted text preview: A. P > P e . B. P < P e . C. P = P e . 6. The natural level of output A. is fixed. B. can change. C. has increased over time. 7. An increase in the markup of prices over costs ____ the natural rate of unemployment. A. decreases. B. increases. C. does not change. D. equals. 8. Explain your answer to question 7. In your explanation, draw a graph with clearly-labeled curves and axes, and explain why and how a curve or curves shift in your graph. Answer keys 1. A 2. B 3. B 4. E 5. C 6. B 7. B. 8. An increase in markups shifts the PS curve downwards, but the WS curve stays the same. Thus, the natural rate of unemployment increases....
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2010_Econ%20110A%20blanchard%204e%20Ch%206%20HomeworkQuestions

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