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:

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