In the long run, the output level which is obtained when capital (K) and labor (L)...
In the long run, the output level which is obtained when capital (K) and labor (L) are employed at the maximum level for a given level of technology is called the:
a) real output
b) nominal output
c) actual output
d) potential output
Homework Answers
Ans) the correct option is d) potential output
Potential output is the amount of goods and services that an economy produce when labor and capital are fully employed.
Add Answer to:
In the long run, the output level which is obtained when capital
(K) and labor (L)...
A firm uses two types of inputs, labor (L) and capital (K), to produce an output,...
A firm uses two types of inputs, labor (L) and capital (K), to produce an output, which is sold in a perfectly competitive market. The production function is given by y = f(L, K) = L 1 6 K 1 6 for all L, K ≥ 0. The price of labor is w > 0 and the price of capital is 1. Each unit of the output is sold at price p > 0. First, we consider the short-run decision...
output andwhile the short-run model determines 42. The long-run model determines inflation. and potential; long-run inflation;...
output andwhile the short-run model determines 42. The long-run model determines inflation. and potential; long-run inflation; current output; current a. potential; unemployment; current output; long-run b. current; long-run inflation; unemployment; current d. potential; unemployment; unemployment; current e current; unemployment; potential output; curren 43. In the equation I,/Y, -a, -b(R,-), if b is close to zero, investment is not very sensitive to real interest rate changes. is very sensitive to changes in the marginal product of capital. is very sensitive to...
A firm discovers that when it uses K units of capital and L units of labor,...
A firm discovers that when it uses K units of capital and L units of labor, it is able to produce X = L^1/4*K^3/4 units of output. a. Draw the graph of isoquants in labor-capital plane. b. Suppose that the firm produces 24 units of output using 16 units of capital and 81 units of labor. Compute MRTS subscript LK. Compute the MPL. Compute the MPK. c. On the basis of your answer to part (b), is the equation MRTS...
A firm produces output Q by using capital K and labor L in fixed proportions, i.e....
A firm produces output Q by using capital K and labor L in fixed proportions, i.e. Q = F (K ,L ) = min {K, L/3}. The price of a unit of labor is w = 6, the price of a unit of capital is r = 2 and the price of output is p = 20. a) Draw the isoquant for Q = 8. b) Find the marginal product of labor. Suppose that (in part c and d) the...
Which of the following is not a determinant of the long-run level of real GDP? A....
Which of the following is not a determinant of the long-run level of real GDP? A. the price level. B. the amount of capital used by firms. C. available stock of human capital. D. available technology
If Q is total real output, K is capital in use, L is labor employed, an...
If Q is total real output, K is capital in use, L is labor employed, an increase in the productivity of labor would imply a(n):? increase in Q/L.? increase in L/K.? decrease in (Q + K)/L.? decrease in Q/K.? ?increase in K/L. Which of the following is true of the agricultural sector in developing countries?? ?It causes a rapid growth in the economy's national income. ?It relies heavily on technology. ?A very small percentage of labor force is employed in...
Suppose labor (L) and capital (K) are fixed proportion inputs, and that each unit of output...
Suppose labor (L) and capital (K) are fixed proportion inputs, and that each unit of output must be produced with exactly 5 units of labor and 2 unit of capital. The price of a unit of labor is w, and the price of a unit of capital is r. a. Write down the production function. b. Derive the equation for the expansion path. c. Derive the equation for the long-run total cost function. d. Graphically depict the labor demand curve....
Let K be the level of capital in the short run. The prices of capital and labor are r = 10 and w-...
Let K be the level of capital in the short run. The prices of capital and labor are r = 10 and w-5, respectively. For each of the following production functions, (1) derive the short-run cost function (5 pts), (2) derive the long-run cost function (5 pts), and (3) illustrate how you derive the long-run cost function with isoquants and isocosts (5 pts). Hint: for the long-run cost function, first set up the cost minimization problem. (a) (15 pts) f(K,...
1. A firm operates in the long run. Its long-run production function is given as: Q...
1. A firm operates in the long run. Its long-run production function is given as: Q = LK, where Qis units of output, Lis units of labor, and K is units of capital. (a) Obtain six integer combinations of Land K when Q = 12. (b) Obtain six integer combinations of Land K when Q = 18. (c) Use the twelve integer combinations of Land K obtained in parts (a) and (b) to construct two isoquants on a two-dimensional plane....
The long-run equilibrium level of output is determined by (changes in the price level, consumer demand,...
The long-run equilibrium level
of output is determined by (changes in the price level,
consumer demand, capital, labor, and technology);
Therefore it will (increase to a new equilibrium, remain at
the full-employment level, decrease to a new equilibrium)
if the aggregate demand curve shifts to the right.
5. The long-run aggregate supply curve Aa Aa Suppose the hypothetical economy of Larryopia produces real GDP of $40 billion when unemployment is at its natural rate. Use the purple line (diamond symbols)...
output andwhile the short-run model determines 42. The long-run model determines inflation. and potential; long-run inflation; current output; current a. potential; unemployment; current output; long-run b. current; long-run inflation; unemployment; current d. potential; unemployment; unemployment; current e current; unemployment; potential output; curren 43. In the equation I,/Y, -a, -b(R,-), if b is close to zero, investment is not very sensitive to real interest rate changes. is very sensitive to changes in the marginal product of capital. is very sensitive to...
Let K be the level of capital in the short run. The prices of capital and labor are r = 10 and w-5, respectively. For each of the following production functions, (1) derive the short-run cost function (5 pts), (2) derive the long-run cost function (5 pts), and (3) illustrate how you derive the long-run cost function with isoquants and isocosts (5 pts). Hint: for the long-run cost function, first set up the cost minimization problem. (a) (15 pts) f(K,...
1. A firm operates in the long run. Its long-run production function is given as: Q = LK, where Qis units of output, Lis units of labor, and K is units of capital. (a) Obtain six integer combinations of Land K when Q = 12. (b) Obtain six integer combinations of Land K when Q = 18. (c) Use the twelve integer combinations of Land K obtained in parts (a) and (b) to construct two isoquants on a two-dimensional plane....
The long-run equilibrium level
of output is determined by (changes in the price level,
consumer demand, capital, labor, and technology);
Therefore it will (increase to a new equilibrium, remain at
the full-employment level, decrease to a new equilibrium)
if the aggregate demand curve shifts to the right.
5. The long-run aggregate supply curve Aa Aa Suppose the hypothetical economy of Larryopia produces real GDP of $40 billion when unemployment is at its natural rate. Use the purple line (diamond symbols)...
Most questions answered within 3 hours.
-
The heights in feet of some of the girls of SEU
are: 5.8, 6.1, 5.9, 5.4, 5.6,...
asked 14 minutes ago -
Caspian Sea Drinks is considering the purchase of a new water
filtration system produced by Rube...
asked 19 minutes ago -
Compare and contrast the
social media of Pepsi and Coke? which one is most effective and...
asked 19 minutes ago -
1.
Who initiates a lockout?
Group of answer choices
management
employees
unions
arbitrators
asked 19 minutes ago -
Many celebrities and public figures have Twitter accounts with
large numbers of followers. However, some of...
asked 51 minutes ago -
In #13-16, use the following information. At the 0.01 level of
significance, test the claim that...
asked 30 minutes ago -
Suppose you wanted to make a buffer with pH 3.00. What chemicals
would you grab off...
asked 49 minutes ago -
A 195 g mass attached to a horizontal spring oscillates at a
frequency of 5.20 Hz...
asked 33 minutes ago -
Given the reaction where 1.00 mol H2(g) is burned in excess
O2(g) at 25 °C,
H2(g)...
asked 43 minutes ago -
Elemental phosphorus is produced by the reaction, 2Ca3(PO4)2
+6SiO2 +10C→6CaSiO3 +10CO+P4 Suppose that you have 7.00...
asked 50 minutes ago -
A nationwide survey found that 64% of people in the
Kingdom like Berger. If 3 people...
asked 1 hour ago -
CYTOGENETIC MAPS VS LINKAGE MAPS
how do you read and extract information from cytogenetic and
linkage...
asked 1 hour ago