The price elasticity of demand for a variable input will be greater
A) the fewer substitutes there are for the final product.
B) the easier it is for a particular input to be substituted for by other inputs.
C) the lower the price elasticity of supply of all other inputs.
D) the smaller the proportion of total costs accounted for by a particular variable input.
Answer: B
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An increase in planned investment would be likely to cause
a. an increase in planned consumption. b. an increase in the rate of planned saving in the economy. c. an expanding level of national income. d. All of these.
If the market for butter is perfectly competitive, then the demand curve facing a firm that produces butter will be:
A. perfectly inelastic. B. perfectly elastic. C. unit elastic. D. upward sloping.
Stagflation refers to a situation in which the economy is experiencing:
A. high economic growth and high inflation. B. low economic growth and high inflation. C. high economic growth and low inflation. D. low economic growth and low inflation.
If the opportunity cost of producing one basketball in Romania is 3 Barbie dolls, while the opportunity cost of producing one basketball in Nigeria is 2 Barbie dolls, _______ has the comparative advantage in the production of basketballs.
A. Romania B. Nigeria C. both Romania and Nigeria D. neither Romania nor Nigeria