An Increase in the Price of Capital Will Reduce the Demand

question 354

True/False

An increase in the price of capital will reduce the demand for labor if capital and labor are complementary resources.

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Definitions:

Marginal Utility

The extra utility a consumer obtains from the consumption of 1 additional unit of a good or service; equal to the change in total utility divided by the change in the quantity consumed.

Inelastic Nature

Characterizes a product or service whose demand or supply does not significantly change in response to price adjustments.

Agricultural Demand

The desire and ability to purchase agricultural products at various prices.

U.S. Farm Exports

Agricultural products produced in the United States that are sold to other countries, contributing to the U.S. economy and global food supply.