If labor and capital are perfect complements in production, short run supply curves are vertical.
Answer the following statement true (T) or false (F)
True
Rationale: If capital cannot be varied, there is no way to increase production when output price rises.
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
In a "game," strategies are
A) the reactions of firms to the changes in the economy. B) the laws regulating the industry. C) the plans made by the participants. D) the potential returns the participants may get.
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.
Economic choice and competitive behavior are the result of
a. basic human greed. b. poverty. c. private ownership of resources. d. scarcity.