During the Black Plague, capital became worthless. What can explain this?
A) Capital's marginal product fell because there was less labor.
B) Capitalists died off at a greater rate than the workers.
C) Capital's marginal product increased but the marginal product of labor decreased.
D) Workers forgot how to use the capital.
A
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What happens to the demand for a good if a complement's price increases?
A) The demand increases and the demand curve shifts rightward. B) The demand decreases and the demand curve shifts rightward. C) The demand increases and the demand curve shifts leftward. D) The demand decreases and the demand curve shifts leftward. E) There is no impact on demand for the good and the demand curve does not shift.
A country will export wheat if, with no international trade, ______
A. it produces a surplus of wheat B. its opportunity cost of producing wheat is below the world price C. its domestic price of wheat exceeds the world price D. other countries have a shortage of wheat
Standby passengers on airlines who pay low rates for seats benefit from the low price. How are the airlines affected?
A. They lose, because the standby passengers do not cover the full cost of the seats. B. They gain, because the additional revenue covers the “fixed costs” of the flight. C. They lose, because the gain of the passengers must necessarily come at the expense of the airline. D. They benefit as long as the additional revenue from the passengers exceeds the marginal cost. E. Uncertain, because economic theory says nothing about this sort of situation.
Causes of market failure include
a. externalities and market power. b. market power and incorrect forecasts of consumer demand. c. externalities and foreign competition. d. incorrect forecasts of consumer demand and foreign competition.