Suppose that Christine owns her own CPA firm. She uses only two inputs in her business: her hours worked (labor) and a computer (capital). In the short run, Christine most likely considers
A)both labor and capital to be fixed.
B)both labor and capital to be variable.
C)capital to be variable and labor to be fixed.
D)labor to be variable and capital to be fixed.

Question

Quizplus · Accepted Answer

In the short run, Christine is likely to consider capital to be fixed since it may be difficult or expensive to acquire additional computers in the short run. However, she can vary her labor hours by working more or fewer hours. Therefore, Christine most likely considers labor to be variable and capital to be fixed in the short run.

Suppose That Christine Owns Her Own CPA Firm