Consider a Firm Using Three Inputs: Unskilled Labor,skilled Labor,and Capital

question 9

Multiple Choice

Consider a firm using three inputs: unskilled labor,skilled labor,and capital.Unskilled labor and capital are substitutes in production,while skilled labor and capital are complements in production.If the price of capital decreases,then

• A) employment of skilled labor increases and employment of unskilled labor decreases.
• B) employment of both skilled and unskilled labor decreases.
• C) employment of skilled labor increases but the effect on employment of unskilled labor is ambiguous.
• D) employment of skilled labor could increase or decrease and the employment of unskilled labor definitely decreases.

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Definitions:

Cognition

The mental action or process of acquiring knowledge and understanding through thought, experience, and the senses.

Gardner's Multiple Intelligences

Gardner's Multiple Intelligences theory proposes that intelligence is not a single general ability, but rather is composed of various distinct types of cognitive capabilities.

Tacit

Understood or implied without being stated openly; known intuitively or through unspoken context.

Cross-Cultural Study

A research method that involves comparing cultures or different cultural groups, to understand universal and specific behaviors or social phenomena.