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:

Least-Squares Regression

A statistical method to determine a line of best fit by minimizing the sum of squares of the distances of data points from the proposed line.

Sum Of Squares

A statistical measure that quantifies the variation or dispersion of a set of data points, by calculating the sum of the squared differences from the mean.

Best-Fitting Line

A line through a scatter plot of data points that best expresses the relationship between those points.

Observed Errors

The discrepancies between measured values and their true, expected, or theoretical values.