If Capital Becomes Very Expensive and Labor Is Cheap, a Producer

question 13

Multiple Choice

If capital becomes very expensive and labor is cheap, a producer will want to use more units of labor and fewer units of capital if the technology permits this substitution. What measures how freely the producer can vary inputs as their relative prices change, but the amount of output produced remains constant?

• A) homothetic production function
• B) elasticity of substitution
• C) income elasticity of demand

---

Definitions:

Vocalization

The act of producing sound with the vocal cords to communicate or express oneself.

Decibels

A unit of measurement for sound intensity or loudness, often used to compare levels of noise or sound pressure.

Sound Amplitude

The height of a sound wave, which determines its loudness or volume.

Perception Of Sound

The process by which sounds are interpreted and understood by the brain, involving the conversion of sound waves into neural signals.