Suppose there is a decline in the demand for the product labor is producing. Furthermore, the price of capital, which is complementary to labor, increases. Thus, the demand for labor
A. will decrease.
B. will increase.
C. may either increase or decrease.
D. will not change.
Answer: A
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The price of an airline ticket from Denver to Washington, D.C. costs $600. A bus ticket costs $150. Traveling by plane takes 6 hours compared with 51 hours by bus. Other things constant, an individual would gain by choosing air travel if, and only if, his time were valued at more than
What will be an ideal response?
Economic growth with an increased willingness to engage in international trade will always improve the economic well-being of a large country.
Answer the following statement true (T) or false (F)
The price elasticity of demand measures
A. how responsive consumers are to a change in income. B. changes in demand. C. how responsive consumers are to a change in price. D. how responsive market prices are to a change in demand.
From 2009 through 2012, the long-term real interest paid by the safest U.S. corporations fell from 4 percent to 2 percent. During that same period, the federal funds rate was roughly constant at 0.25 percent a year. A fall in the federal funds rate _______ the supply of bank loans and the supply of loanable funds, and _______ the equilibrium real interest rate.
Fill in the blank(s) with the appropriate word(s).