Assume that capital and labor are complementary inputs. If the firm decreases the amount of capital it employs, this would
A. shift the firm?s MP schedule for labor to the right.
B. cause the firm to move down along the MP schedule for labor.
C. cause the firm to move up along its MP schedule for labor.
D. shift the firm?s MP schedule for labor to the left.
Answer: D
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The clearest indicator of a switch to a less expansionary fiscal policy is a
A) rise in the actual deficit. B) fall in the actual deficit. C) rise in the natural employment deficit. D) fall in the natural employment deficit.
The Clayton Antitrust Act
a. was opposed by labor unions. b. defended monopolies. c. outlawed price discrimination. d. never went into effect.
Network effects on the Internet:
A. help firms like Google and Facebook dominate their respective markets. B. allow many firms to operate, making Internet markets highly competitive. C. cause economies of scale to be exhausted quickly. D. create a level playing field for all types of media, communication, and commerce on the Internet.
Refer to the diagram. Suppose that, as expected, aggregate demand declines from AD 2 to AD 1 . A direct move of the economy from c to a would best reflect:
A. new classical economics.
B. mainstream economics.
C. the real-business-cycle theory.
D. a coordination failure.