The input-substitution effect of an increase in the wage comes about because higher wages:
A. increase production costs, and final good prices will rise, reducing the quantity demanded of the product.
B. increase production costs, and final good prices will rise, increasing the quantity demanded of the product.
C. make labor less expensive as an input, leading firms to switch to labor as an input.
D. make labor more expensive as an input, leading firms to switch to other inputs.
Answer: D
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Empirical studies suggest that as real GDP per person increases the level of pollution:
A. decreases. B. remains constant. C. first increases then decreases. D. increases.
At present, the Social Security System
A) takes in more revenue than it spends on benefits. B) takes in less revenue than it spends on benefits. C) equates the revenue that it receives and the amount it spends on benefits. D) has no idea of just how much revenue it taking in.
Economists have found that firms are
A) less likely to change prices as a result of shocks to the aggregate economy than shocks limited to the firm's particular sector. B) more likely to change prices as a result of shocks to the aggregate economy than shocks limited to the firm's particular sector. C) equally likely to change prices as a result of shocks to the aggregate economy as they are shocks limited to the firm's particular sector. D) unlikely to change prices as a result of both shocks to the aggregate economy and shocks limited to the firm's particular sector.
Which of the following causes the supply curve to shift to the left?
a. increase in consumer’s output prices b. increase in seller’s input prices c. decrease in consumer’s output prices d. decrease in seller’s input prices