Explain the output effectof a factor price increase
What will be an ideal response?
An increase in the price of a factor leads to an increase in the cost of production. When a firm faces higher costs, it is likely to produce less in the short run. When the firm cuts its output, it lowers its demand for all factors of production.
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If a decrease in price decreases a monopolist's total revenue, then
A) demand is elastic. B) demand is inelastic. C) demand is unit elastic. D) the law of demand is violated.
The marginal productivity theory of income states that a person's total income is determined by
A) how much the individual works. B) how profitable the firm the individual works for is. C) how much the individual has inherited. D) the amount and productivity of factors of production the individual owns.
Personal consumption spending is the most sensitive component of aggregate demand to monetary policy
a. True b. False Indicate whether the statement is true or false
Liberal critics of the Obama stimulus plan focused their concern on
A. their belief that the package was too small and therefore insufficient to the task. B. the plan's requirement that plans be shovel ready. C. their belief that the package was too large and created a threat of inflation. D. the fact that there were too few tax cuts in the plan.