Intermediate Macroeconomics 2

What Determines a Nation’s Total Output?

• The economy’s ability to produce goods and services depend on its prices of inputs or factors of production and technology to turn inputs into output.

• The economy’s ability to produce goods and services depend on its quantity of inputs or factors of production and technology to turn inputs into output.

• The economy’s ability to produce goods and services depend on the demand of consumers

• The economy’s ability to produce goods and services depend on Capital resources and human resources

What is the economy's production function?

• Y=f(L,R)

• Y=f(L,T,R)

• Y=K/L

• Y=f(L,K,R)

What should the company do when MPL > W/P?

• firm should hire less L

• firm should hire the right amount of L

• firm should hire more L

• firm should not hire L

In the neoclassical model, there are 3 markets: Goods and services market, _______ market, Loanable funds market

MPL(marginal Production of Labor)=?

The revenue maximized when:

• MPL=W/P

• MPL=R/P

• MPK=R/P

• MPK=W/P

How many labor the firm should employ if W/P=5 to maxmize the revenue?

How Factor Prices Are Determined?

Factor prices are determined at the _______ where factor supply equals factor demand in factor markets.

The production function displays constant returns:

What is the marginal product of labor (MPL) when output increases by 20 units as the number of workers increases from 1 to 2?