150a_test2

150a_test2 - Econ 150a Labor Economics Practice test for Ch...

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Econ 150a Labor Economics Practice test for Ch 3 and 4. 1. A firm can use 2 inputs for production, capital or labor. These two inputs are perfect substitutes with one machine producing or two employees producing Q=1. The price of capital is $750 and wages are $400. a. What quantities of capital and labor will the firm use in the short-run? Capital is not a fixed cost. b. What quantities of capital and labor will the firm use in the long-run? 2. In a particular industry, labor supply is S = 10 + w while labor demand is D = 40 - 4 w , where E is the level of employment and w is the hourly wage. a. What is the equilibrium wage and employment if the labor market is competitive? b. Suppose the government sets a minimum hourly wage of $8. How many additional workers would want a job at the minimum wage? How many workers would lose their jobs? c. What is the unemployment rate? 2. We begin with a market in equilibrium. The supply curve has slope of 5 and the demand curve has a slope of –1. a.
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150a_test2 - Econ 150a Labor Economics Practice test for Ch...

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