One major fault with factor pricing analysis is that marginal productivity theory merely attempts to justify the income distribution that the capitalist system yields
a. True
b. False
Indicate whether the statement is true or false
False
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Two goods are said to be substitutes when a fall in the price of one good:
A) leads to a left shift in the demand for the other good. B) leads to a rise in the price of the other good. C) doesn't affect the demand for the other good. D) leads to a right shift in the demand for the other good.
Compared to the situation in which a good is legal, making the good illegal and imposing ________ results in less being sold
A) a much higher fine on sellers than on buyers B) a much higher fine on buyers than on sellers C) any fine on either the buyer or the seller D) all of the above
The marginal product of capital indicates ________. Therefore the MPK curve is also ________
A) the quantity of capital supplied for a given rental price; the equilibrium price of capital B) the quantity of capital demanded for a given rental price; the demand curve of capital C) the quantity of capital demanded for a given rental price; the equilibrium price of capital D) the quantity of capital supplied for a given rental price; the supply curve of capital E) none of the above
An increase in demand and an increase in supply will lead to
A) unambiguous increases in both price and quantity. B) unambiguous decreases in both price and quantity. C) an unambiguous increase in quantity, but the effect on price is indeterminate. D) an unambiguous increase in price, but the effect on quantity is indeterminate.