Consider an economy that only produces steel and shoes; steel is capital intensive and shoes are labor intensive. How will emigration of labor from this economy affect the marginal productivity of labor?
a. It will fall.
b. It will not change.
c. It will rise.
d. It will fall in the short run and rise in the long run.
Answer: b. It will not change.
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The U.S. aggregate demand curve shifts leftward if
A) the economic conditions in Europe improve so that European incomes increase. B) there is a tax cut. C) the Federal Reserve increases the interest rate. D) the exchange rate falls.
Standard life-cycle analysis predicts that a stock market crash that suddenly reduces the sale value of stocks ________ consumption expenditures
A) reduces B) increases C) has no effect on D) All of the above are possible with a market crash.
Elasticity is a useful tool in learning more about the character of demand. It depicts
a. the way to find market equilibrium b. a ratio of percentage changes c. how easily prices adjust to changing market (supply and demand) conditions d. how price changes as quantity demanded changes e. how consumers react to shifts in demand
A ____ is a graph whose axes show the quantities of two inputs that are used to produce some output
a. production indifference map b. two-variable diagram c. scalar diagram d. time-series graph