If the Price of Labor Falls Relative to the Price

question 55

Multiple Choice

If the price of labor falls relative to the price of capital, and as a result the quantity of capital employed decreases, then it can be concluded that

• A) the substitution effect is greater than the output effect.
• B) the output effect is greater than the substitution effect.
• C) the income effect is greater than the output effect.
• D) labor cannot be easily substituted for capital.

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Definitions:

Shoulder Blade

Also known as the scapula, it is the bone that connects the humerus (upper arm bone) with the clavicle (collar bone).

Physiology

The branch of biology that deals with the normal functions of living organisms and their parts, including the physical and chemical processes involved.

Levels of Organization

A hierarchical structure for organizing complexity in biology, ranging from atoms to molecules, cells, tissues, organs, organ systems, organisms, populations, communities, ecosystems, and the biosphere.

Midsagittal

Relating to the median plane or a section that divides the body into equal left and right halves.