Suppose a technological improvement increases the productivity of a firm's capital and, simultaneously, its workers' union negotiates a wage increase. We can predict that:
A. the firm will use relatively more capital and relatively less labor.
B. the firm will use relatively more labor and relatively less capital.
C. inputs of capital and labor will be unchanged.
D. the firm's equilibrium output will necessarily increase.
Answer: A
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A) is a slave to Congress. B) is totally free from political pressure. C) probably cannot pursue monetary policies that completely contradict the federal government's fiscal policies. D) is a hoax and a shame that ought to be abolished.
Estimation by WLS
A) although harder than OLS, will always produce a smaller variance. B) does not mean that you should use homoskedasticity-only standard errors on the transformed equation. C) requires quite a bit of knowledge about the conditional variance function. D) makes it very hard to interpret the coefficients, since the data is now weighted and not any longer in its original form.
A department store buys a wool coat for $120 and sets its retail price at $300 . The coat costs $85 to produce. When the coat doesn't sell, the store marks the price down to $200, then $100, and finally $70 . At $70, Amy buys the coat. What was the coat's true value? Why?
The best strategy for each player if this game is repeated is: A: CheatA: CollaborateB: CheatA: 1, B: ?1A: ?1, B: 1B: CollaborateA: ?1, B: 1A: 1, B: ?1
A. his or her dominant strategy. B. to cheat. C. to collaborate. D. a mixed strategy.