If the wage rate rises and there is a net decrease in the use of capital by a firm
A. the substitution effect outweighed the output effect.
B. the output effect outweighed the substitution effect.
C. the substitution and output effects were equal.
D. there is no way to determine the relative strengths of the output and substitution effects.
B. the output effect outweighed the substitution effect.
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The data below relates to a pure monopoly and the product it produces. What is the profit-maximizing output and price for this firm?
A. P = $15; Q = 3
B. P = $12; Q = 5
C. P = $18; Q = 2
D. P = $14; Q = 4
Taxes that enhance economic efficiency will have a better chance of passing through Congress than less efficient tax reforms. _____
a. This is probably enough to produce an efficient tax system b. This is not enough to produce an efficient tax system c. This shows special interests have no impact. d. This shows that many government officials act in the public interest.
Discuss the relationship between world trade and world Gross Domestic Product (GDP) since the early 1950s
What will be an ideal response?
Shel and Fran are neighbors. They work at the same firm and hold the same title. Shel finds that when Fran's consumption rises, Shel feels worse off. Fran feels the same way about Shel's consumption. Fran has bought a new Jaguar (a luxury car), and shortly thereafter, Shel bought a new Mercedes (also a luxury car). Shel and Fran seem to be:
A. imposing external benefits on each other. B. unaware of the other's actions. C. involved in a positional arms race. D. making independent rational consumption decisions.