Suppose labor and capital are the only two resources used for production. In the long run:
a. both capital and labor can move freely between sectors.
b. only labor can move between sectors.
c. only capital can move between sectors.
d. both capital and labor are blocked from moving between sectors.
Answer: a. both capital and labor can move freely between sectors.
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The federal budget is defined as
A) an annual statement of expenditures and tax revenues of the U.S. government. B) a monthly statement of whether the U.S. government is in deficit or surplus. C) a monthly statement of expenditure laws passed by the U.S. government. D) an annual statement of what policy actions the U.S. government has pursued. E) an annual statement of U.S. government violations of international laws.
The LM curve automatically shifts to the right when the intersection point of the IS and LM curves occurs at a point
A) beyond full-employment income. B) in the liquidity trap. C) less than full-employment income. D) where planned saving is less than planned investment.
Which of the following refers to a relatively high correlation among the independent variables of a regression equation?
A) autocorrelation B) the identification problem C) statistically insignificant regression coefficients D) multicollinearity
In the above figure, the break-even output and price is
A) $9 and 14. B) $13 and 14. C) $11 and 16. D) $10 and 17.