1.If the price of capital declines, the consequent output effect would be: 2.Whi

Question

1.If the price of capital declines, the consequent output effect would be:

2.Which of the following describes the equilibrium condition in a purely competitive labor market?

3.Suppose all workers are identical, but working for Ajax is more pleasant than working for Acme. In all other nonwage aspects the two firms offer the same job characteristics. We would expect:

a. greater, the more elastic the demand for the product. b. greater, the less elastic the demand for the product. c. negative. d. of consequence only if capital and labor are used in fixed proportions.

Explanation / Answer

(1) (a)

If price of capital declines, product cost and product price will decline. The higher the elasticity, the higher the output effect of a price reduction.

(2) (a)

Equilibrium condition is: MPL x Price = wage rate

Or, MRPL = w

(3) (b)

Lower wage rate is being compensated by better working environment.

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.