8 Numeric and Graphing Questions -The First Table Above Gives the Labor Demand and Labor

question 21

Essay

8 Numeric and Graphing Questions
$$\begin{array} { |c | c | c } \begin{array} { c } \text { Labor demand } \\\text { (billions of } \\\text { hours per } \\\text { year) }\end{array} & \begin{array} { c } \text { Real wage rate } \\\text { (2005 dollars) }\end{array} & \begin{array} { c } \text { Labor supply } \\\text { (billions of } \\\text { hours per } \\\text { year) }\end{array} \\\hline 0 & 30 & 6 \\\hline 1 & 25 & 5 \\\hline 2 & 20 & 4 \\\hline 3 & 15 & 3 \\\hline 4 & 10 & 2 \\\hline\end{array}$$
$$\begin{array} { | c | c | } \hline \begin{array} { c } \text { Employment } \\\text { (billions of } \\\text { hours per } \\\text { year) }\end{array} & \begin{array} { c } \text { Real GDP } \\\text { (billions of } \\\text { 2005 dollars) }\end{array} \\\hline 6 & 95 \\\hline 5 & 90 \\\hline 4 & 80 \\\hline 3 & 60 \\\hline 2 & 30 \\\hline\end{array}$$
-The first table above gives the labor demand and labor supply schedules for a nation.The second table gives its production function.
a) What is the equilibrium real wage rate and the level of employment?
b) What is potential GDP?

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Definitions:

Spoken Aloud

Reading or saying words out loud.

Numerator

The top number in a fraction that shows how many parts of a whole are being considered.

Denominator

In a fraction, the number below the line which indicates the total number of parts into which the whole is divided.