Assuming capital and labor are substitutes, an improvement in technology that affects only the productivity of capital would cause a firm to employ more capital but leave the amount of labor employed unchanged
Indicate whether the statement is true or false
FALSE
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Refer to Figure 4.5. If you know that at least 8 students will choose Solid, you should choose
A) Solid. B) Dash. C) either Solid or Dash, as your payout will be the same either way. D) You need to know what the 9th student will choose before you will know your best choice.
Assume the long-term real interest rate is 4% and the expected inflation rate is 5%
If the Fed decreases the money supply and as a result, the expected inflation rate decreases to 2%, then based on the Fisher effect, the long-term real interest rate will ________ and the long-term nominal interest rate will ________. A) fall to 4%; rise to 7% B) remain at 4%; fall to 6% C) fall to 1%; fall to 6% D) fall to 6%; remain at -1%
The primary source of funds for finance companies is ________
A) commercial paper B) deposits C) securities D) the central bank
Consider the production possibilities frontier displayed in the figure shown. Which of the following combinations could be produced?
A. (20 watermelons, 400 bushels of apples)
B. (15 watermelons, 100 bushels of apples)
C. (10 watermelons, 300 bushels of apples)
D. (10 watermelons, 400 bushels of apples)