Question

12 If the current real interest rate increases and the substitution effect dominates, then the current labor supply ()

A increases

B decreases

C unchanged

D uncertain

15 The following statement about the current labor demand of the enterprise is correct ()

A Total factor productivity decreases, and the labor demand curve moves to the right

B The current capital increases and the current labor demand curve shifts to the left

C enterprises receive government subsidies, the current labor demand curve shifts to the right

D The government raises income tax, and the labor demand curve shifts to the left

16 The current optimal investment law of an enterprise is ()

A MPK-d = r

B MPK'-d = r

C MPK + d = r

D MPK '+ d = r

Answer 1

12. If the current real interest increases, and the substitution effect dominates, then the current labor supply will increase. Here, only option A is correct. (Other options are incorrect as the result do not follow).

15. With increase in total productivity, demand for labor curve must shift to the right (Option A is incorrect)

With increase in capital, demand for labor curve must shift to the right (Option B is incorrect)

With subsidy given to the firms, demand for labor curve must shift to the right (Option C is correct)

Whereas, increase in income taxes shifts labor supply curve to the left. (Option D is incorrect)

Thus, only option C is correct.

16. Investment is held by MPK' = r+d (where r is the rate of interest and d is the depreciation) . With rise in r, investment falls. Here, only option B is correct.