A firm is using a single variable input, labor, with a given amount of a fixed input, capital. If the level of capital is decreased,
A. the average product curve of labor curve shifts downward.
B. the total product curve of labor curve shifts downward.
C. the marginal product curve of labor shifts downward.
D. all of the above
E. none of the above
Answer: D
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The capital stock increases whenever
A) gross investment is exceeds net investment. B) net investment exceeds gross investment. C) gross investment is negative. D) net investment is positive.
The most important influence on a firm's demand for a factor of production is __________.
Fill in the blank(s) with the appropriate word(s).
The term "double coincidence of wants"
A. means that people are trying to purchase the same thing. B. is a situation where runaway prices are the result of printing too much money. C. describes a barter situation where individuals agree to trade commodities in amounts satisfactory to both parties. D. means that people with the same commodities agree to trade among themselves.
An increase in government spending can raise wages and prices in the short term.
Answer the following statement true (T) or false (F)