[MACRO] GROUP 4 ACE NHÀ HỌ NGUYỄN - WEEK 4 LEARNING QUIZ

What is the real wage?

• The price of labor in terms of money

• The price of labor in terms of output

• The price of capital in terms of money

• The price of capital in terms of output

Which of the following is NOT considered one of the main factors of production that determine an economy's ability to produce goods and services?

• Capital resources

• Human resources

• Natural resources

• Financial resources

What does the production function Y = F(K, L) represent in the goods market?

• The relationship between money supply and inflation

• The amount of output produced given capital (K) and labor (L)

• The impact of government policies on production

• The equilibrium between demand and supply in the market

In a competitive market, when will a profit-maximizing firm stop hiring additional workers?

• When the marginal product of labor equals zero

• When the marginal product of labor equals the nominal wage (W)

• When the marginal product of labor equals the real wage (W/P)

• When the supply of labor is completely exhausted

Why do diminishing marginal returns occur when a firm increases labor while keeping capital fixed?

• Because workers become more skilled over time

• Because additional workers have fewer machines to work with, reducing productivity

• Because wages increase as more workers are hired

• Because total output decreases as more workers are added

Why is the marginal propensity to consume (MPC) always between 0 and 1?

• Because individuals spend all additional income on consumption, leaving no savings.

• Because individuals consume a portion of additional income while saving the rest, meaning not all additional income is spent.

• Because individuals always save all additional income instead of consuming it.

• Because consumption is not related to income changes, making MPC always equal to 1.

A company’s production function follows the Cobb-Douglas Production Function Q = 10K⁰·⁶L⁰·⁴, where K represents capital and L represents labor. If the firm is currently using 64 units of capital and 81 units of labor, what is the difference between the current output (Q) produced and when L increases by 10%?Answer: (a)   units (Answer in natural number)

A manufacturing firm in an emerging economy is evaluating whether to invest in new machinery. The firm’s analysts estimate that the marginal product of capital (MPK) is decreasing due to diminishing returns. In an environment where wages are stable but borrowing costs are rising, how should the firm adjust its capital investment strategy?

• Reduce capital investment, as diminishing MPK means further investment will always be inefficient.

• Invest only in labor to avoid diminishing MPK.

• Ignore MPK and focus solely on historical production trends.

• Continue investing in capital as long as MPK exceeds the cost of capital.

A firm currently employs 100 workers, each contributing to a total production of 5000 units. After hiring an additional worker, total output rises to 5050 units. However, the firm notices that further increases in labor yield no additional output. Based on this observation, which of the following is the best strategy for producing more while maximizing efficiency?

• Continue hiring more workers as long as MPL is positive.

• Reduce labor input to avoid diminishing returns.

• Ignore MPL and focus on keeping wages low.

• Improve capital investment or worker training to enhance MPL.

Suppose that an economy’s production function is Cobb-Douglas with a parameter α = 0.45. This economy opened its border for immigration, thus increasing the labor force by 15%. The rental price of capital increases by (a)   percent. Round your answer to the nearest unit.