If Technology Dictates That Labor and Capital Must Be Used

question 128

Multiple Choice

If technology dictates that labor and capital must be used in fixed proportions, an increase in the price of capital will cause a firm to use

• A) more labor as a consequence of the substitution effect.
• B) more labor as a consequence of the output effect.
• C) less labor as a consequence of the substitution effect.
• D) less labor as a consequence of the output effect.

---

Definitions:

Superficially Resemble

To appear similar or alike on the surface, but possibly different in more profound or structural aspects.

Deuterostomes

Organisms characterized by undergoing deuterostomy during embryonic development, where the anus forms before the mouth.

Blastopore

The opening formed during early embryonic development in animals, which can develop into the mouth or anus depending on the species.

Radial Cleavage

A pattern of animal embryonic development in which the divisions of the egg are symmetrical around the polar axis, typical of deuterostomes.