Prices that do not always adjust rapidly to maintain equality between quantity supplied and quantity demanded are

Question 1 options:

	Administered prices
	Sticky prices
	Regulatory prices
	Market prices

Question 2(2.5 points)

Refer to the figure below. Assume that a Cobb-Douglas production function is a good representation of the economy and that the economy was initially at equilibrium. Please note that W/P presents the real wage and that the quantity of labor (N) is equal to the amount of labor in the market.

What type of shock would cause the following shock in the labor market?

Question 2 options:

	An increase in the number of machines and equipment
	An increase in the tax rate on households
	An increase in the price of oil
	An increase in the labor force participation rate

Question 3(2.5 points)

Refer to the figure below. Assume that a Cobb-Douglas production function is a good representation of the economy and that the economy was initially at equilibrium. Please note that W/P presents the real wage and that the quantity of labor (N) is equal to the amount of labor in the market.

Refer to the figure above. The shift from the original labor demand curve to the new labor demand curve would cause what to happen to the production function?

Question 3 options:

	An upward shift of the entire production function
	A downward shift of the entire production function.
	A rightward movement along the production function (therefore no shift of the production function)
	A leftward movement along the production function (therefore no shift of the production function)

Question 4(2.5 points)