Suppose Capital Is Readily Substitutable for Labor and That the Price

question 155

Multiple Choice

Suppose capital is readily substitutable for labor and that the price of capital falls. We can conclude that the

• A) substitution effect will tend to reduce the demand for labor.
• B) output effect will tend to reduce the demand for labor.
• C) demand for labor will necessarily decline.
• D) demand for labor will necessarily increase.

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Definitions:

Object Permanence

Object Permanence is the understanding that objects continue to exist even when they cannot be seen, heard, or touched, a concept developed in early childhood.

Object Permanence

The understanding that objects continue to exist even when they cannot be seen, heard, or otherwise sensed, a crucial stage in the cognitive development of infants.

Object Permanence

The understanding that objects continue to exist even when they cannot be observed or heard directly, a concept typically developed during infancy.

Deferred Imitation

The ability to reproduce a behavior observed at an earlier time, even in the absence of the model or immediate incentive.