Labor and Capital Are Substitutes in Production

question 8

Multiple Choice

Labor and capital are substitutes in production. If labor becomes more educated, then, ceteris paribus,

• A) capital is substituted for labor.
• B) labor is substituted for capital.
• C) output decreases as does the rental rate.
• D) output increases as does the price of the output.

Recognize the significance of the Timmons Model in understanding the entrepreneurial process.

Learn methods of resource acquisition specific to social entrepreneurship.

Differentiate between traditional ventures and social purpose ventures in terms of market impact.

Comprehend the role of venture philanthropy in supporting nonprofit organizations.

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Definitions:

Capital Equipment

Long-lasting tools, machinery, and infrastructure utilized in the production of goods and services.

Inventory Changes

Adjustments in the quantity or value of goods that a company has in stock, which can affect financial and operational performance.

Personal Income

The total income received by individuals from all sources, including wages, dividends, and government benefits.

Corporate Income Taxes

Taxes imposed on the net income of corporations by the government.