The price elasticity of demand for a variable input will be greater
A) the fewer substitutes there are for the final product.
B) the easier it is for a particular input to be substituted for by other inputs.
C) the lower the price elasticity of supply of all other inputs.
D) the smaller the proportion of total costs accounted for by a particular variable input.
B
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One point virtually all economists agree on when defining money is that: a. money must be spendable
b. money must be liquid. c. money must be accepted as payment. d. all of the above are correct.
Which of the following is the main weakness of the classical model?
a. It assumes that the labor supply curve is vertical. b. It assumes that the labor supply curve is horizontal. c. It assumes that the labor market clears. d. It assumes that the labor demand curve is horizontal. e. It assumes that the labor demand curve is vertical.
The behavior of the perfectly competitive firm
A. theoretically leads to an inefficient allocation of resources. B. maximizes the benefits to consumers, given the resources available to the economy. C. reduces output in order to raise prices in the short term. D. results in excess capacity and inefficiency.
The unemployment rate:
A. increases before the start of a recession. B. decreases during recessions. C. increases only after the recession has ended. D. increases during recessions.