Two Resource Inputs, Capital and Labor, Are Complementary and Used

question 19

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.

Comprehend the scope of psychology, including the study of mental activities, behaviors, and the underlying brain functions.

Identify the impact of nature and nurture on psychological traits and behaviors.

Distinguish between various psychological perspectives and their approaches to understanding human thought and behavior.

Learn the methods scientists use to study the brain and its functions.

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Definitions:

Perfectly Competitive

A market structure characterized by a large number of buyers and sellers, all selling identical products, with no single entity able to influence the market price.

Externalities

Costs or benefits that affect a party who did not choose to incur that cost or benefit, often leading to market failure if not corrected by government intervention.

Marginal Cost

The boost in expenditure due to producing an additional unit of a product or service.

Coase Theorem

A principle that suggests that if trade in an externality is possible and there are no transaction costs, bargaining will lead to an efficient outcome regardless of the initial allocation of property rights.