Explain why employment may rise or fall in response to an increase in total factor productivity....

Explain why employment may rise or fall in response to an increase in total factor productivity.

A.

An increase in total factor productivity causes the PPF to become steeper at any given quantity of leisure but also to shift down, and the relative magnitudes of these shifts are unknown.

B.

An increase in total factor productivity causes the PPF to become flatter at any given quantity of leisure but also to shift up, and the relative magnitudes of these shifts are unknown.

C.

There are opposing income and substitution effects: the substitution effect is for hours worked to decrease, and the income effect is for hours worked to increase.

D.

There are opposing income and substitution effects: the substitution effect is for hours worked to increase, and the income effect is for hours worked to decrease.

Expert Solution

A) An increase in total factor productivity causes the PPF to become steeper at any given quantity of leisure but also to shift down and the relative magnitude of these shifts are unknown

Employment may rise or falling response to an increase in total factor productivity because when cost increases PPF become more steeper at any given quantity hence its shift to down.

Rahul Sunny answered 2 years ago

An increase in total factor productivity will lead to which of the following? An increase in...

An increase in total factor productivity will lead to which of the following? An increase in the productivity of labor but not capital. A decrease in the productivity of capital, but not labor. An increase in the productivity of labor and capital. A decrease in the productivity of labor, but not capital.

Is it possible for total employment and the unemployment rate to rise simultaneously? Why or why...

Is it possible for total employment and the unemployment rate to rise simultaneously? Why or why not. (Note: you might find it useful to demonstrate this with a numerical example.)

1) Which of the following things would increase the value of Total Factor Productivity (TFP)? Select...

1) Which of the following things would increase the value of Total Factor Productivity (TFP)? Select one: a. A new production method that can produce smaller, more efficient microchips. b. None of the other answers. c. A company hires a large amount of workers after building a brand new factory. d. Foreign investors invest in physical capital. 2) The country of Rupertopia has one factory for all its workers in 2011 and 2012. There were 100 workers in 2011 and...

What happens to aggregate consumption C, employment N, and real wages w when total factor productivity...

What happens to aggregate consumption C, employment N, and real wages w when total factor productivity increases?

Question 3 Define “productivity”. Compare single factor productivity measure with total factor productivity measure. What do...

Question 3 Define “productivity”. Compare single factor productivity measure with total factor productivity measure. What do we mean when we say productivity is a “relative” measure? Various financial data for the past two years follow. Calculate the total factor productivity and the single-factor productivity measures for labor, capital, and raw materials for this company for both years. What do these measures tell you about this company? Last Year This Year Output: Sales $201,005 $202,015 Inputs: Labor $30,010 $40,010 Raw materials...

a) Please calculate the Total Factor Productivity of a countryfor a year with the following...

a) Please calculate the Total Factor Productivity of a country for a year with the following data on Real GDP of the country along with other required information:Y = $ 2,000 billionL = 40 billion hoursK = $ 10, 000 billionα = 0.7b) If the labour force increases by 20%, how it will affect the total factor productivity?

explain the rise and fall of Radio corporation of America (RCA)

Special purpose entities (SPE) were a factor in Enron’s accounting scandal. Read “The Rise and Fall...

Special purpose entities (SPE) were a factor in Enron’s accounting scandal. Read “The Rise and Fall of Enron” for more background information. Consider that FASB rules at that time only required 3% of the SPE to be held by investors outside of the company. Consider the pros and cons of following the FASB rules. Was Enron in violation of these rules? If not, what was the concern for SPE in Enron’s consolidated financial statements. Be sure to cite ASC codification...

On the Solow model, are z(Solow residual) and Total Factor Productivity the same?

On the Solow model, are z(Solow residual) and Total Factor Productivity the same? Or different? Please explain.

One possible factor that may give rise to increasing returns to scale is A. specialization of...

One possible factor that may give rise to increasing returns to scale is A. specialization of labor. B. concave isoquants. C. the managerial function

Question