If the slope of a straight line is 5 and if X (the variable on the horizontal axis) increases by 4, then Y (the variable on the vertical axis) will
A. increase by 20.
B. increase by 0.8.
C. decrease by 20.
D. decrease by 0.8.
Answer: A
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Therefore, in the long run, the quantity of labor hired falls more than in the short run, making long-run demand the more elastic. Yes, long-run demand for labor is more elastic than short-run demand in the case where labor and capital are substitutes-the cycle is different but the result is the same. When the wage rate rises and the amount of labor falls, the marginal revenue product of capital (and thus the demand for capital) will rise. The firm will use more capital, and in the substitute case, this reduces the marginal product of labor. The firm responds by using less labor, and the cycle repeats. Less labor and more capital will be employed in the long-run equilibrium than in the short-run equilibrium.
(i) Consider the situation before the Japanese factory is built. What area represents the rents earned by American laborers? What area represents the rents and profits earned by owners of factories and firms?
(ii) Consider the situation after the Japanese factory is built. What area represents the rents earned by American laborers? What area represents the rents and profits earned by American owners of factories and firms? What area represents the rents and profits earned by the Japanese owners of the new factory?
(iii) Did the new Japanese factory raise or lower the aggregate rents and profits earned by Americans? How did its entry affect the distribution of American income?
Given the information in the figure above, Liz has a comparative advantage in ________ because ________
A) smoothies; her opportunity cost of producing smoothies is lower than Joe's B) salads; her opportunity cost of producing salads is lower than Joe's C) smoothies; she can produce more smoothies per hour than Joe can D) salads; she can produce more salads per hour than Joe can E) both goods; she can produce more of both goods per hour than Joe can
Firms are ________ with an economic profit of zero, they will ________ in the industry because they ________ be better off in another industry
A) satisfied, stay, won't B) unsatisfied, leave, will C) satisfied, leave, will D) unsatisfied, stay, won't
If the government drafts people into the armed forces rather than persuading them to volunteer
A) it conceals in part the cost to its citizens of obtaining military personnel. B) it employs a nondiscriminatory system because everyone drafted incurs the same cost and can be paid the same wage. C) it must pay higher wages since many people resent the draft. D) it reduces the cost to the nation as a whole of obtaining military personnel. E) it tends to obtain people with the lowest opportunity costs.