Assume That the Relative Prices of Capital and Labor Have

question 191

Multiple Choice

Assume that the relative prices of capital and labor have not changed. As a firm's expenditures for capital and labor decrease, its isocost line

• A) shifts out parallel to the original isocost line.
• B) shifts in parallel to the original isocost line.
• C) rotates outward on the Y-intercept.
• D) rotates outward on the X-intercept.

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Definitions:

Consequentialist Thought

Ethical philosophy considering the consequences of actions as the primary basis for any judgment about the rightness or wrongness of those actions.

Utilitarian Thought

A philosophical belief that the best action is the one that maximizes utility, usually defined as that which produces the greatest well-being of the greatest number of people.

A Theory of Justice

This is a seminal work by philosopher John Rawls, proposing principles of justice that would lead to a fair and equitable society.

Basic Structure

The fundamental organization or framework of a system, theory, or concept.