Two Resource Inputs, Capital and Labor, Are Complementary and Used

question 289

Multiple Choice

Two resource inputs, capital and labor, are complementary and used in fixed proportions. An increase in the price of capital will

• A)increase the demand for labor.
• B)decrease the demand for labor.
• C)decrease the quantity demanded for labor.
• D)have no effect, because the relationship is fixed.

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Definitions:

Final Cash Flow

The last cash flow in a series of transactions or in the timeline of an investment, project, or finance-related activity.

Advertise

The act of promoting goods, services, or ideas through various forms of media to inform or attract customers.

Operating Cash Flow

The sum of money produced through a company's regular business activities.

EBIT

Earnings Before Interest and Taxes represents a company's profitability that accounts for all costs except for interest and taxes.