If labor is 80 percent of total costs in industry A and 20 percent in industry B, then other things equal, we would expect the elasticity of demand for labor to be
A) greater in industry A than in industry B.
B) greater in industry B than in industry A.
C) the same in both industries.
D) uncertain since no general relationship exists between cost shares and elasticities.
A
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Suppose Paris thinks a 5 percent increase in her hourly wage as an incentive to work more hours while the price level also increases by 5 percent. Paris is said to be suffering from
A) money illusion. B) rationality. C) irrationality. D) the effects of competition.
An increase in the quantity of capital per worker would: a. rotate the per-worker production function outward
b. rotate the per-worker production function inward. c. shift the per-worker production function downwards. d. shift the per-worker production function upwards. e. result in a rightward movement along the current per-worker production function.
In order to minimize the cost of producing a given level of output, a firm manager should use more inputs when:
A. that input's price falls. B. that input's price rises. C. the prices of other inputs fall. D. that input's price remains the same.
Farm programs such as those of the United States and the European Union:
A. encourage the United States and the European Union to use tariffs and quotas to restrict agricultural imports. B. cause U.S. and EU farmers to produce less than domestic consumers want to purchase. C. increase world market prices for agricultural products. D. raise farm output in developing nations.