A storm destroys several factories, reducing the stock of capital. What effect does this event have on factor markets?
a. Wages and the rental price of capital both rise.
b. Wages and the rental price of capital both fall.
c. Wages fall and the rental price of capital rises.
d. Wages rise and the rental price of capital falls.
Answer: c. Wages fall and the rental price of capital rises.
You might also like to view...
Which of the following is characteristic of monopolistically competitive industries? a. Product differentiation
b. A substantial likelihood of collusion. c. Relatively small market shares of each producer. d. Both (a) and (c) are characteristics of monopolistically competitive industries.
What is the biggest obstacle to successful economic growth in very low income countries?
a. lack of education b. poor health and limited health care facilities c. high political instability d. lack of technology
Quantity Demanded
What will be an ideal response?
Seven of the 50 states account for approximately half of all union members in the United States.
a. true b. false