If Technology Dictates That Labor and Capital Must Be Used

question 170

Multiple Choice

If technology dictates that labor and capital must be used in fixed proportions, an increase in the price of capital will cause a firm to use

• A)more labor as a consequence of the substitution effect.
• B)more labor as a consequence of the output effect.
• C)less labor as a consequence of the substitution effect.
• D)less labor as a consequence of the output effect.

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Definitions:

Supply Chain

A system of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer.

Downstream

In a supply chain, refers to processes or activities that occur after a particular point, often closer to the end customer.

Pull Model

A supply chain model where the initiation of production and movement of goods is based on customer demand rather than anticipating it.

Cloud-Based

Pertaining to services, applications, or data storage hosted on remote servers accessed through the internet.