The Input-Substitution Effect Decreases the Labor Input Per Unit of Output

question 144

Multiple Choice

The input-substitution effect decreases the labor input per unit of output while the output effect

• A) decreases the price of the output.
• B) decreases the total output.
• C) increases the price of the output.
• D) increases the total output.

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Definitions:

Least Possible Cost

The minimum expense required to achieve a particular economic objective.

General Equilibrium

A situation in which supply and demand are balanced across all markets in the economy.

Simultaneously Equilibrium

A condition in which demand and supply are balanced at the same time across multiple markets or within a complex system.

Capital Flow

The movement of money for the purpose of investment, trade, or business production between countries.