Suppose Capital Is Readily Substitutable for Labor and That the Price

question 126

Multiple Choice

Suppose capital is readily substitutable for labor and that the price of capital falls. We can conclude that the

• A)substitution effect will tend to reduce the demand for labor.
• B)output effect will tend to reduce the demand for labor.
• C)demand for labor will necessarily decline.
• D)demand for labor will necessarily increase.

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Definitions:

Slave Uprising

Refers to revolts by enslaved people against their conditions and masters, historically significant for challenging slavery.

British Caribbean

Refers to the parts of the Caribbean once colonized or influenced by Great Britain, including islands like Jamaica, Barbados, and Trinidad and Tobago.

Philadelphia Campaign

A series of battles during the American Revolutionary War that aimed to capture the American capital at the time, Philadelphia, by the British.

Continental Army

The army formed by the Thirteen American Colonies during the American Revolutionary War to fight against British forces.