A both employment and the real wage rate would

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Unformatted text preview: a given amount of capital and labor. They can occur because of: i. Technology shocks ii. Natural environmental shocks iii. Energy price shocks iv. Financial crises b. Supply shocks involve changes in A and rotate the production function. c. A positive supply shock causes: i. The production function to rotate higher, ii. The marginal product of capital to increase, iii. The real (rental) cost of capital to increase, iv. The marginal product of labor to increase, and v. The real wage to increase. d. A negative supply shock has the opposite effect. VI. Multiple Choice Questions. Circle the letter corresponding to the best answer. 1) 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...
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This note was uploaded on 02/25/2014 for the course ECON 100B taught by Professor Wood during the Spring '08 term at University of California, Berkeley.

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