MACROECONOMICS Help What is the quantity of labor employed, potential GDP, the real wage rate, and total labor income?

MACROECONOMICS Help in the quantity of labor employed, potential GDP, the real wage rate, and total labor income is described in the following way

Explanation:

1.Compute the total cost of labor for each quantity of labor the firm might employ, and enter these figures in the table. Now determine the marginal cost of the firm's product as the firm increases its output. Divide the increase in total labor cost by the increase in total output to find the marginal cost.

2.When the labor market is in equilibrium, the economy is at full employment. Adjustment to labor market equilibrium occurs through changes in the real hourly wage rate: When the real hourly wage rate is above the market clearing equilibrium wage, e.g., at $15, there is an excess supply (surplus) of labor.

3.According to this equilibrium, at a real wage of $5.40 per hour, employment is 180,000 hours of labor per week. w = the real wage = W/P or the money wage divided by the price level. Also, we assume that, in the short run, the marginal physical product of labor is positive but decreaseing.

4.Full employment GDP is a term used to describe an economy that is operating at an ideal level of employment, where economic output is at its highest potential. It is a state of balance in which savings is equal to investment and the economy is neither expanding too rapidly nor falling into a recession.

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