If the Capital Stock ________ While the Supply of Labor

question 122

Multiple Choice

If the capital stock ________ while the supply of labor ________, it is likely that the productivity of labor will fall.

• A) increases; decreases
• B) remains fixed; increases
• C) increases; increases
• D) increases; remains fixed

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Definitions:

Profit Maximization

The method used by a company to establish the price and quantity of production that generates the maximum profit.

Lowest Output

The minimum amount of goods or services produced by an entity under given conditions.

Shut Down

A short-term decision by a firm to cease operations because current operation is not covering variable costs.

Firm

An organization that produces goods or provides services, usually with the aim of making a profit.