The elasticity of substitution is the
A) change in capital over the change in the price of labor.
B) percentage change in capital over the percentage change in labor.
C) change in the price of capital over the change in the price of labor.
D) percentage change in the price of capital over the percentage change in the price of labor.
E) percentage change in the capital/labor ratio resulting from a 1-percent change in the relative price of labor to capital.
Correct Answer:
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Q2: Labor demand is more elastic the greater
Q3: The production function relates
A) factor prices to
Q4: What is the most accurate description of
Q5: Labor demand is more elastic
A) the greater
Q6: The marginal rate of technical substitution at
Q7: Ally owns a shoe store. The market
Q8: At a wage of $25 per hour,
Q9: What is an example of the substitution
Q10: Why is the short run labor demand
Q11: At what point should a firm stop
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