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Figure 8-5 Panel (A) Shows an Economy's Aggregate Production

question 135

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Figure 8-5 Figure 8-5   Panel (a)  shows an economy's aggregate production function, Panel (b)  shows the labor market and Panel (c)  shows the economy's long-run aggregate supply curve. -Refer to Figure 8-5. In the labor market represented in Panel (b) , I. the equilibrium real wage equals $40,000. II. at the equilibrium real wage, 100 million workers are employed. III. the equilibrium real wage is that which prevails when the economy achieves its natural level of employment. A)  I only B)  I and II only C)  I, II, and III D)  None of the above; to determine if the labor market is in equilibrium, we need information on the economy's aggregate production function. Panel (a) shows an economy's aggregate production function, Panel (b) shows the labor market and Panel (c) shows the economy's long-run aggregate supply curve.
-Refer to Figure 8-5. In the labor market represented in Panel (b) ,
I. the equilibrium real wage equals $40,000.
II. at the equilibrium real wage, 100 million workers are employed.
III. the equilibrium real wage is that which prevails when the economy achieves its natural level of employment.


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