1.1. In 2007, national income in the United States was $11,186.9 billion. In the same year, 137 million workers were employed, at an average wage of $57,526 per worker per year.

a. How much compensation of employees was paid in the United States in 2007?

b. Analyze the factor distribution of income. What percentage of national income was received in the form of compensation to employees in 2007?

c. Suppose that a huge wave of corporate downsizing leads many terminated employees to open their own businesses.

What is the effect on the factor distribution of income?

d. Suppose the supply of labor rises due to an increase in the retirement age. What happens to the percentage of national income received in the form of compensation of employees?