Suppose Capital and Labor Are Perfect Complements for a Particular

question 57

Multiple Choice

Suppose capital and labor are perfect complements for a particular production process. If the price of labor increases, holding the price of capital and the level of output constant, the firm should:

• A)use more capital and less labor.
• B)use more labor and less capital.
• C)use the same amounts of capital and labor.
• D)eliminate all use of labor.

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Definitions:

Peer Pressure

A social influence exerted by one’s peer group encouraging individuals to change their attitudes, values, or behaviors to conform to group norms.

Conformation

The arrangement or structure of something, particularly referring to the physical shape or configuration.

Bickering

Petty arguing or disputing often characterized by repetitive, trivial, and irritating exchange between individuals.