Quiz - Chapter 29

# Quiz - Chapter 29 - Points Awarded 118.00 Points M issed...

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Points Awarded 118.00 Points Missed 2.00 Percentage 98.3% 1. The classical dichotomy is a discovery that states A) real and nominal variables are actually the same thing. B) when the economy is at full employment, the forces that determine the real variables are independent of those that determine the nominal variables. C) throughout the business cycle, the forces that determine the real variables are independent of those that determine the nominal variables. D) only nominal variables cause business cycles. Points Earned: 1.0/1.0 Correct Answer(s): B 2. The country of Kemper is on its production function at point W in the above figure. If the population increases with no change in capital or technology, the economy will A) move to point such as Y.

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B) remain at point W. C) move to point such as X. D) move to point such as Z. Points Earned: 1.0/1.0 Correct Answer(s): C 3. At the full-employment equilibrium in the labor market, A) there is no unemployment. B) there are no job vacancies. C) there is neither a shortage nor a surplus of labor. D) the money wage rate equals the real wage rate. Points Earned: 1.0/1.0 Correct Answer(s): C 4. Suppose that the money wage rate is \$22 per hour and that the price level is 100. If the money wage rate falls to \$11 per hour and the price level does not change, what happens to >the real wage rate?
A) The real wage rate doubles. B) The real wage rate rises but does not double. C) The real wage rate does not change. D) The real wage rate falls. Points Earned: 1.0/1.0 Correct Answer(s): D 5. Quantity of leisure (billions of hours per year) Real GDP (trillions of 2000 dollars per year) 100 9.5 150 9.0 200 8.0 250 6.5 300 4.5 The table above shows the relationship between leisure and real GDP in the country of Progress. The citizens of Progress have 400 billion hours each year to spend between leisure and labor. If the quantity of labor increases from 150 billion hours to 200 billion hours a year, the marginal product of labor is ________. A) \$1.5 trillion B) \$8.0 trillion C) \$15 an hour D) \$30 an hour

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Points Earned: 1.0/1.0 Correct Answer(s): D 6. If the real wage rate is greater than the equilibrium wage rate, the result is A) lower than normal unemployment B) full employment C) higher than normal unemployment D) None of the above answers is correct because wages have no effect on unemployment Points Earned: 0.0/1.0 Correct Answer(s): A 7. Wage rate (dollars per hour) Labor Supply (hours) Labor Demand (hours) 22 900 940 23 910 930 24 920 920 25 930 910
26 940 900 27 950 890 Using the data in the above table, suppose that the minimum wage is \$25 per hour. Then A) the minimum wage has no effect because it is below the equilibrium wage. B) the minimum wage has no effect because it is above the equilibrium wage.

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## This note was uploaded on 09/13/2011 for the course ECON 206 taught by Professor Parkin during the Spring '11 term at Buena Vista.

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Quiz - Chapter 29 - Points Awarded 118.00 Points M issed...

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