1. Suppose that the marginal product of capital at the Cherry Garden is 10 trees of Cherries and the price of capital is $80. If the wage for labor is $15 and the marginal product of labor is 2 trees, the firm:

a. Could produce the same amount of Cherries at a lower cost by using more labor and less capital

b. Could produce the same amount of Cherries at a lower cost by using more capital and less labor

c. Cannot produce the same amount of Cherries at a lower cost by changing the mix of labor and capital

d. Might be able to produce the same amount of Cherries at a lower cost by changing the mix of labor and capital, but it is impossible to tell without more information.

2. If discouraged workers become encouraged by recent improvements in the job market and beginning searching for jobs, this would cause the unemployment rate to ____, the labor force participation rate to _____, and the employment population ratio to ____.

a. Rise; rise; not change

b. Rise; rise; fall

c. Not change; rise; fall

d. rise; not change; not change

e. None of the above.

3. Discuss the main characteristics of thelabourforce inCanada. What are the reasons of the increasing participation rate of women in thelabourforce?

4. Increasing the level of EI (Employment Insurance) Benefits will prolong the average length of unemployment. Is it true, false or uncertain? Explain your answer.