If an earthquake destroys some of the capital stock, the neoclassical theory of distribution predicts O the real wage will fall and the real rental price of capital will rise. O both the real wage and the real rental price of capital will rise. the real wage will rise and the real rental price of capital will fall. both the real wage and the real rental price of capital will fall.
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- Suppose that an economy’s production function is Cobb–Douglas with parameter = 0.3 a. What fractions of income do capital and labor receive? b. Suppose that immigration increases the labor force by 10 percent. What happens to total output (in percent)? The rental price of capital? The real wage? c. Suppose that a gift of capital from abroad raises the capital stock by 10 percent. What happens to total output (in percent)? The rental price of capital? The real wage ?Most economists believe that classicalmacroeconomic theorya. is valid only in the long run.b. is valid only in the short run.c. is always valid.d. is never valid.Suppose an economy's production is defined by the following neoclassical production function: Y=3K1/3L2/3. Derive the labor demand equation by expressing labor, L, as a function of the real wage, w=W/P Don't answer by pen paper and don't use chatgpt otherwise we will give dounvote
- A proposal that is attracting increasing attention is a requirement that employers provide theirworkers with paid sick leave. This problem asks you to analyze the effects of such a policy on wages andemployment in normal times.a. How, if at all, would such a policy affect labor demand? (explain using MRP)b. How, if at all, would it affect labor supply? (explain using willingness to work)c. How, if at all, would the policy affect normal employment and the normal real wage (or is itnot possible to tell)? include graphsThe production function is Cobb-Douglas: Y = AK^αL^1−α, where K = 1000, and L = 100. α=0,365 A=2,3 a) How much output does the economy produce?b) What is the real wage rate equal to in equilibrium? c) What is the real rental rate of capital equal to in equilibrium?Suppose that a borrower and a lender agree on the nominal interest rateto be paid on a loan. Then inflation turns out to be higher than they bothexpected.a. Is the real Interest rate on this loan higher or lower than expected?b. Does the lender gain or lose from this unexpectedly high inflation?Does the borrower gain or lose?c. Inflation during the 1970s was much higher than most people hadexpected when the decade began. How did this affect homeowners whoobtained fixed-rate mortgages during the 1960s? How did it affect thebanks that lent the money?To find additional study resources, visit cengagebrain.com, and searchfor "Mankiw."
- economic Suppose that an economy’s production function is Cobb–Douglas with parameter a=0.3. a. What fractions of income do capital and labor receive? b. Suppose that immigration increases the labor force by 10 percent.What happens to total output (in percent)? The rental price of capital? The real wage? c. Suppose that a gift of capital from abroad raises the capital stock by 10 percent.What happens to total output (in percent)? The rental price of capital? The real wage? d. Suppose that a technological advance raises the value of the parameter A by 10 percent. What happens to total output (in percent)? The rental price of capital? The real wage?Suppose a firm’s hourly marginal product of labor is given by MPN = A (200 – N) If A = 0.2 and the real wage rate is $10 per hour, how much labor will the firm want to hire? Suppose the real wage rate rises to $20 per hour. How much labor will the firm want to hire? With the real wage rate at $10 per hour, how much labor will the firm want to hire if A rises to 0.5?Interest, inflation, and purchasing power Suppose Dalia is a fan of young-adult fiction and buys only young-adult books. Dalia deposits $2,000 into a savings account that pays an annual nominal interest rate of 20%. Assume this interest rate is fixed, and so it will not change over time. On the day she makes her deposit, suppose that a young-adult book has a price of $20.00. Initially, Dalia's $2,000 deposit has a purchasing power of #????? young-adult books. For each of the annual inflation rates given in the following table, first determine the new price of a young-adult book, assuming it rises at the rate of inflation. Then enter the corresponding purchasing power of Dalia's deposit after one year in the first row of the table for each inflation rate. Finally, enter the value for the real interest rate at each of the given inflation rates. Hint: Round your answers in the first row down to the nearest young-adult book. For example, if you find that the deposit will cover…
- In a consumption-leisure model, where P is the price of consumption and w is the wageand h is the hours, how do I mathematically calculate the effect of wage jncrease (wage/price of good) on the ff: >consumption>leisure>hours worked How do I know which is stronger between income effect and substitution effect due to increase in w/p? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.5. Bill is a college student. Every week his parents give him an allowance of $100. If he work at McDonald, he can earn $15 per hour. Every day he spends 16 hours for sleep and study. For the rest time, he must decide how to allocate it between working and social life (leisure). Currently he chooses work 20 hours per week. a ) Draw a consumption-leisure diagram, carefully illustrating Bill's current labour supply decision. Mak sure to calculate all relevant values and label all axes b ) Suppose the wage rate falls to $12. Assuming the income effect dominates the substitution effect, in your graph his new labour supply decision. Please specify the substitution effect and the income effec in your graphWhich of the following describes the interest rate on an investment after calculating the impact of inflation?O NominalO RealO FinancialO Profit