Web Activity 1

To find more about business sector productivity, log on to www.bls.gov and click the "Subject Areas" tab, then click "Multifactor Productivity."

1. What has been the general trend for multifactor productivity in the U.S. from 1987-2010?
2. What does this trend suggest has happened to production functions in the U.S.?
3. Assuming this change in productivity has happened to all firms, how will this change in productivity affect cost curves?

Web Activity 2

Unit labor cost takes into account both productivity and the cost of labor. Find the trend in unit labor cost for the United States by visiting www.bls.gov, click the "Subject Areas" tab, and then click "Labor Productivity & Costs."

1. Record the values of the unit labor cost index for the most recent four quarters.
2. How did productivity and the cost of labor affect the unit labor cost for this time period?
3. Ceteris paribus, what will happen to the cost curves and economic profit as a result of these changes in labor cost?