Multiple Choice
Suppose a firm uses three inputs in production,capital,labor,and land.If the price of labor increases,the firm adjusts by decreasing the amount of labor used,increasing the amount of capital used and decreasing the amount of land used.What does this imply about the relationship between the three inputs?
A) Land and labor are net substitutes while labor and capital are net complements.
B) Land and labor are net complements while labor and capital are net substitutes.
C) Land and labor are gross substitutes while labor and capital are gross complements.
D) Land and labor are gross complements while labor and capital are gross substitutes.
E) none of the above
Correct Answer:
Verified
Correct Answer:
Verified
Q23: Which combination of wages and rental rates
Q24: If a firm incurs high fixed costs
Q25: If two inputs are gross substitutes,their substitution
Q26: Which of the following increases the power
Q27: Which of the following is a true
Q28: Suppose the substitution elasticity between capital and
Q30: When wages increase,<br>A) the scale and substitution
Q31: Suppose the supply of capital is relatively
Q32: If two inputs are gross substitutes,their substitution
Q33: Suppose the price of capital increases to