If the demand and supply both increase equally, then the ...

[swpotter12]

If the demand and supply both increase equally, then the equilibrium price ________, and the equilibrium quantity ________.
 
  A) increases; increases
  B) does not change; increases
  C) decreases; does not change
  D) increases; does not change
  E) increases; decreases

Question 2

The first table above gives the labor demand and labor supply schedules for a nation. The second table gives its production function.
 
  a. What are the equilibrium real wage rate and the level of employment?
  b. What is potential GDP?

[carojassy25]

Answer to Question 1

B

Answer to Question 2

a. The equilibrium real wage rate is 15 an hour because this is the real wage rate for which the quantity of labor demanded equals the quantity supplied. The equilibrium level of employment is 3 billion hours a year.
b. With employment equal to 3 billion hours per year, potential GDP is equal to 60 billion.