Suppose that a rare virus infects and kills a significant percentage of the population. Assuming that land and labor are complements in a farming production function, what would happen to the wages earned by workers and the rents earned by landowners?
a. Both wages and rents would increase.
b. Both wages and rents would decrease.
c. Wages would increase, and rents would decrease.
d. Wages would decrease, and rents would increase.
c
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If the cost of labor decreases the isocost line will
A) stay the same. B) shift outward in parallel fashion. C) rotate outward around the point where only capital is employed in production. D) shift inward in parallel fashion.
Potential solutions to sell a high-quality used car include
a. offering a warranty b. selling through a reputable dealer c. documenting the complete repair history d. all of the above
If the Fed wants to lower the money supply
A) it should lower the discount rate. B) it should buy bonds. C) it should lower the reserve requirement. D) it should sell bonds.
Which of the following is true?
a. Cost-reducing automated production techniques will expand output directly and/or release scarce resources for the expansion of output in other areas. b. Automated production processes are generally adopted regardless of whether they reduce costs. c. Use of the most advanced technology will always minimize the cost of a productive activity. d. Automated production processes eliminate jobs and, thereby, endanger our future living standards.