The price elasticity of demand for labor will be smaller, the
A) smaller is the price elasticity of demand for the final product.
B) easier it is to employ substitute inputs in production.
C) larger is the proportion of wage costs in the total cost of production.
D) longer is the time period under examination.
Answer: A
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The expenditure multiplier explains how a change in
A) real GDP leads to a change in autonomous expenditure. B) autonomous expenditure leads to a change in real GDP. C) real GDP leads to a change in induced expenditure. D) induced expenditure leads to a change in autonomous expenditure. E) induced expenditure leads to a change in real GDP.
Explain the relationships between the marginal product of labor and the demand for labor, and the marginal product of capital and the demand for capital
What will be an ideal response?
When consumers or businessmen stop collecting information to make decisions at the point where marginal cost of data collection equals the marginal utility of the data, economists would call the decisions based on existing data
a. perfect decisions. b. optimally imperfect decisions. c. joint decisions. d. rent seeking.
Which of the following is NOT a reason why economists usually work with mathematical models?
A. Because most economic choices are quantitative in nature. B. Mathematical models can provide precision, while quantitative models cannot. C. Mathematical modeling imposes intellectual rigor. D. Mathematical models can be used to settle disputes over normative economic questions.