The relationship between the elasticity of product demand and the elasticity of demand for labor employed in its production is such that, other things being equal:
A. the more elastic the demand for the product, the less elastic the demand for labor.
B. the more elastic the demand for the product, the more elastic the demand for labor.
C. the elasticity of product demand only affects the elasticity of labor demand when the
product market is purely competitive.
D. if product demand is perfectly elastic, labor demand will be perfectly inelastic.
Answer: B
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Figure 10-6
In Figure 10-6, which graph best illustrates an adverse supply shock accompanied by an increase in government spending?
a.
(1)
b.
(2)
c.
(3)
d.
(4)
Which of the following statements is true of capital gains in the U.S.?
A. Capital gains are taxed only if they are long-term. B. Capital gains are taxed only for low-income groups. C. Capital gains are taxed on accrual. D. Capital gains are forgiven at death.
Economists focus on self-interest in explaining choices because:
A. it is a useful way to approach problems. B. individuals often are motivated by selflessness. C. economists know people are selfish even if psychologists don't. D. economists do not believe that there is more to making choices than maximizing utility.
To avoid tariffs, a Japanese firm moves its final assembly line to Mexico and then ships the final products to Canada. This is an example of
A) trade deflection. B) trade diversion. C) protectionism. D) rules of origin.