Suppose labor and capital are the only two resources used for production. In the long run:
A) both capital and labor can move freely between sectors.
B) only labor can move between sectors.
C) only capital can move between sectors.
D) both capital and labor are blocked from moving between sectors.

Question

Quizplus · Accepted Answer

In the long run, both labor and capital can move freely between sectors. This is because in the long run, all factors of production are variable, meaning they can be adjusted to maximize production efficiency. Therefore, capital and labor can be reallocated between different sectors to achieve optimal production levels.

Suppose Labor and Capital Are the Only Two Resources Used