Comment on the following statement: "A firm's demand for labor can be affected by the availability of other inputs."
What will be an ideal response?
The statement is true. If two inputs are complements, the presence of one will increase the productivity of the other. For example, if capital and labor are complements, the presence of capital will increase the demand for labor. However, it is possible for two inputs to be substitutes for one another. In that case, the presence of one will lead to a drop in the demand for the other.
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By common definition, a recession occurs when
A) the international deficit worsens for at least two successive quarters. B) the government budget deficit exceeds the national debt. C) the inflation rate exceeds 3.5 percent. D) real GDP decreases for at least two successive quarters.
Refer to Figure 11-6. In the figure above which letter represents the marginal cost curve?
A) A B) B C) C D) D
Holding the price of a firm's output constant, if the marginal product of labor increases
A) the marginal products of other inputs also increase. B) the marginal revenue product of labor also increases. C) the marginal revenue product of labor may increase or decrease. D) the marginal revenue product of labor decreases.
Between 1790 and 1860, wholesale prices charged by producers of commodities
(a) grew steadily over the period. (b) declined steadily. (c) exhibited wild variations but increased, on average. (d) exhibited wild variations but declined, on average.