When price falls, demand rises.
Answer the following statement true (T) or false (F)
False
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Explain for each event whether it changes short-run aggregate supply, long-run aggregate supply, aggregate demand, or some combination of them
What will be an ideal response?
Suppose two goods (X and Y ) are being produced efficiently and that the production of X is always more labor intensive than the production of Y. Production depends only on two factors (capital and labor); these may be smoothly substituted for each other. The total quantities of these inputs are fixed. An increase in the production of X and a decrease in the production of Y will
a. increase the capital-labor ratio in each firm. b. decrease the capital-labor ratio in each firm. c. leave the capital-labor ratio for each firm unchanged. d. increase the capital-labor ratio in Y production and decrease the capital-labor ratio in X production.
The production function for a competitive firm is Q = K.5L.5. The firm sells its output at a price of $10, and can hire labor at a wage of $5. Capital is fixed at one unit. The profit-maximizing quantity of labor is:
A. 10. B. 2/5. C. 1. D. None of the answers are correct.
WTO talks in the late 1990s led to openings in both financial services and telecommunications
Indicate whether the statement is true or false