The input-substitution effect associated with an increase in the wage implies that as the wage increases, a firm will substitute other inputs for the relatively expensive labor.
Answer the following statement true (T) or false (F)
True
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Taxes and government spending that affect fiscal policy without specific action from policymakers are called:
A. automatic stabilizers. B. discretionary fiscal policy. C. expansionary fiscal policy. D. contractionary fiscal policy.
The source of the water and diamond paradox results from a confusion about
a. luxuries and necessities b. who uses what goods c. the extraordinary role played by consumer surplus in the case of diamonds d. which good lies on the indifference curve e. the role that total and marginal utilities play in determining value
The value and cost of goods are easiest to determine when the goods are
a. common resources. b. public goods. c. club goods. d. private goods.
The price elasticity of demand is measured by the
A. percentage change in quantity demanded divided by the percentage change in price. B. change in price divided by the change in quantity demanded. C. percentage change in price divided by the percentage change in quantity demanded. D. change in quantity demanded divided by the change in price.