The use of large amounts of labor relative to capital in an economy indicates:
a. labor-intensive production
b. capital-intensive production.
c. that wage rates will be relatively high.
d. that hand-made goods are of better quality than machine-made goods.
a
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What will be an ideal response?
Suppose that Pat has the legal right to fly an extremely noisy airplane over Chris's apartment and that he values that right at $1,000 per year. Chris would be willing to pay $1,200 per year to avoid the noise. In that case
a. Pat will be required to eliminate the overflight b. Chris will move to a new apartment c. Pat and Chris have a powerful incentive to agree to eliminate the overflight because both would benefit from it d. some governmental agency will step in to require Pat to choose a different flight pattern e. some governmental agency will require Chris to move to a new apartment
Imagine the government would like to increase revenues by taxing the people. If they place a unit tax on certain goods, this is equivalent to
a. c and e b. shifting the demand curve to the right c. reducing everyone's income by the amount of the unit tax d. raising the fixed costs of producers e. shifting the supply curve to the left
When quantity demanded increases at every possible price, the demand curve has
a. shifted to the left. b. shifted to the right. c. not shifted; rather, we have moved along the demand curve to a new point on the same curve. d. not shifted; rather, the demand curve has become steeper.