Refer to Labor Demand and Labor Supply. What does area A + B + C represent?
The following questions refer to the accompanying diagram, which shows an industry's labor demand and labor supply. Labor and capital are the only factors used by the industry. The industry hires L units of labor at a wage of PL.
a. The industry's total revenue.
b. The rent earned by the industry's laborers.
c. The total wages paid to the industry's laborers.
d. The rent earned by the industry's capital.
a. The industry's total revenue.
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In the aggregate expenditures model, an increase in government spending may:
A. decrease real GDP. B. increase output and employment. C. shift the aggregate expenditures schedule downward. D. reduce the size of the inflationary gap.
If, with one unit of labor, the U.S. can produce 20 units of computer software and 10 units of computer hardware, and China can produce 6 units of software and 6 units of hardware, then trade can make
A. both better off. B. the U.S. better off but not China. C. neither better off. D. China better off but not the U.S.