If the Price of Capital Falls,in the Long Run Under

question 160

Multiple Choice

If the price of capital falls,in the long run under what circumstance could the demand for labor increase?

• A) The demand for labor can never increase when the price of capital falls.
• B) The demand for labor will always increase when the price of capital falls.
• C) It increases if the scale of production increases enough.
• D) It increases if the demand for labor is inelastic.
• E) None of the above answers is correct.

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Definitions:

Cycle Time

The total time from the beginning to the end of a process, providing a measure of the efficiency of production.

Output Rate

The quantity of goods or services produced by a system, machine, or worker in a given time period.

Efficiency

The ability to accomplish a job with a minimum expenditure of time and resources.

Heuristics

Problem-solving methods or strategies that employ practical, experiential approaches rather than guaranteed, optimal solutions.