Consider a Firm That Uses Labor and Capital as the Only

question 88

Multiple Choice

Consider a firm that uses labor and capital as the only inputs.Suppose labor is on the horizontal axis and capital is on the vertical axis.Further,the expansion path has shifted down and average cost curves have shifted up.Which of following provides the most likely explanation for what has happened?

• A)The wage rate decreased
• B)The wage rate increased
• C)The price of capital decreased
• D)The price of capital increased

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Definitions:

Coercive Power

A form of power that is based on the ability to deliver punishments or remove rewards to influence others.

Rebellious

characterizes individuals or actions that resist control, authority, or tradition, often manifesting as a form of protest or dissent.

Discontinuity Effect

A phenomenon where intergroup interactions are more competitive or aggressive than interindividual interactions, often due to perceived group boundaries.

Abrupt Increases

Sudden and significant rises in the level, amount, or degree of something.