The Horizontal (Labor) Intercept of Manny Motors' Isocost Line Is

question 47

Multiple Choice

The horizontal (labor) intercept of Manny Motors' isocost line is 3 million, and the vertical (robot) intercept is 5 million. Which of the following best describes what would happen to the isocost line if the wage increased?

• A) It would shift to the right.
• B) It would rotate outward along the horizontal axis.
• C) It would rotate inward along the horizontal axis.
• D) It would rotate outward along the vertical axis.
• E) It would rotate inward along the vertical axis.

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Definitions:

Classical Economists

Economists from the late 18th and early 19th centuries who focused on the role of free markets in economic development and emphasized the importance of limited government intervention.

Full Employment

The situation in an economy where all who are willing and able to work at prevailing wage rates are employed, with no involuntary unemployment.

Discretionary Fiscal Policy

Involves the use of government spending and tax policies to influence the economy, based on current economic conditions and objectives.

Natural Rate

The natural rate is a concept in economics describing conditions where the economy is at equilibrium, with full employment and no inflationary or deflationary pressures.