Discussion+Section+Problems%2C+Lecture+_3+ANSWERS_1_

Discussion+Section+Problems%2C+Lecture+_3+ANSWERS_1_ - Econ...

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Econ 100B Macroeconomic Analysis Professor Steven Wood Discussion Section Problems from Lecture #3 A. Multiple Choice Questions . Circle the letter corresponding to the best answer. 1. An adverse supply shock would: a. Shift the production function up and decrease marginal products at every level of employment. b. Shift the production function down and decrease marginal products at every level of employment. c. Shift the production function down and increase marginal products at every level of employment. d. Shift the production function up and increase marginal products at every level of employment. 2. Which of the following events would lead to an increase in the marginal product of labor for every quantity of labor? a. An increase in the real wage. b. A decrease in the real wage. c. A favorable supply shock such as a fall in the price of oil. d. An adverse supply shock such as a reduced supply of raw materials. 3. A tremendous flood along the Mississippi River destroys thousands of factories, reducing the nation’s capital stock by 5%. What happens to current employment and the real wage rate if labor supply is positively related to the real wage? a. Both employment and the real wage rate would increase. b. Both employment and the real wage rate would decrease. c.
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Discussion+Section+Problems%2C+Lecture+_3+ANSWERS_1_ - Econ...

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