Suppose a Firm Uses Three Inputs in Production,capital,labor,and Land

question 29

Multiple Choice

Suppose a firm uses three inputs in production,capital,labor,and land.If the price of labor increases,the firm adjusts by decreasing the amount of labor used,increasing the amount of capital used and decreasing the amount of land used.What does this imply about the relationship between the three inputs?

• A) Land and labor are net substitutes while labor and capital are net complements.
• B) Land and labor are net complements while labor and capital are net substitutes.
• C) Land and labor are gross substitutes while labor and capital are gross complements.
• D) Land and labor are gross complements while labor and capital are gross substitutes.
• E) none of the above

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Definitions:

Upward Communication

Communication that flows from the lower levels of a hierarchy to the upper levels, often involving feedback or reports.

Formal Channels

Official, structured communication pathways within an organization, designed for the efficient flow of information and decision-making processes.

Community of Practice

A group of people who share a common interest or profession and improve their skills and knowledge through regular interaction.

Job-related Skill

Specific abilities or expertise required to perform the duties and responsibilities associated with a particular job effectively.