A firm's isocost line shifts parallel outward from the original isocost line as its
A. total cost for capital and labor increases.
B. total cost for capital decreases and its total cost for labor increases.
C. total cost for capital and labor decreases.
D. total cost for capital increases and its total cost for labor decreases.
Answer: A
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A firm raises the price it charges. The firm's total revenue decreases. What can we conclude about the price elasticity of demand?
A) Demand is elastic. B) Demand is unit elastic. C) Demand is inelastic. D) Demand is perfectly inelastic. E) Not enough information is given to conclude anything about price elasticity of demand.
People choose to do something:
A. when they believe the costs outweigh the benefits of the decision. B. when they believe their decision cannot be questioned by anyone else. C. when they believe it won't harm anyone and will better themselves. D. when they believe the benefits outweigh the costs of the decision.
The path of consumption over a lifetime is likely to be ________ the path of income.
A. completely unrelated to B. much less stable than C. about the same as D. much more stable than
Refer to the above figure. Suppose the economy is in equilibrium at point A. If rational expectations exist, an increase in aggregate demand caused by an anticipated increase in the money supply will cause the economy to
A) stay at point A. B) move to point B. C) move to point C. D) move to point D.