If the costs of labor and capital increase in the same proportion, the isocost line will
A) stay the same.
B) shift outward in a parallel fashion.
C) rotate inward around the point where only capital is employed in production.
D) shift inward in a parallel fashion.
B
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The above figure shows a nation's production function. Point A is
A) the maximum amount of real GDP the nation can produce. B) the labor market equilibrium quantity of employment and real GDP. C) attainable if the economy is inefficient. D) attainable if the nation uses resources efficiently. E) unattainable given the state of the economy.
How do firms respond to unplanned inventory changes? What is the effect on their production and GDP?
What will be an ideal response?
In a labor-market pooling equilibrium with high-skill and low-skill workers and where a costly educational degree is used as a signaling device, all else equal, an increase in the wage differential between high- and low-skill workers leads to
A) an increase in the required minimum share of high-skill workers. B) a decrease in the required minimum share of high-skill workers. C) no change in the required minimum share of high-skill workers. D) None of the above answers are correct.
Production quota set below the equilibrium quantity has big effects:
What will be an ideal response?