If Two Inputs Are Complementary and Employed in Fixed Proportions

question 192

Multiple Choice

If two inputs are complementary and employed in fixed proportions, an increase in the price of one input will

• A) decrease the demand for the other input.
• B) increase the demand for the other input.
• C) increase the quantity demanded for the other input.
• D) have no effect on the demand for the other input.

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Definitions:

Rescission

The act of canceling or annulling a contract, returning the parties involved to their positions prior to the agreement.

Nominal Damages

Monetary damages awarded to a plaintiff in a very small amount, typically $1 to $5, to signify that the plaintiff has been wronged by the defendant even though the plaintiff suffered no compensable harm.

Actual Damages

Financial compensation awarded to a plaintiff to recover losses directly resulting from a defendant's actions.

Substantial Performance

A level of performance of a contract deemed acceptable even if it does not comply with all terms, due to substantial compliance with the contract.