Suppose the price of capital falls relative to the wage rate

Assignment Help Business Economics
Reference no: EM131242451

Suppose the price of capital falls relative to the wage rate and, as a result, the demand for labor increases. Are these inputs gross substitutes, or are they gross complements? What can you infer about the relative strengths of the output and substitution effects?

Reference no: EM131242451

Questions Cloud

The own price elasticity of demand for good : Suppose the own price elasticity of demand for good X is -3, its income elasticity is 1, its advertising elasticity is 2, and the cross-price elasticity of demand between it and good Y is -4. Determine how much the consumption of this good will chang..
Calculate the present value of the stream of costs : In the following two cases, calculate the present value of the stream of costs and benefits first using a discount rate of i = .03. Current one-time cost of $40 and future benefits of $1 this year and another $1 per year forever (infinite time horizo..
Distinguish between general and specific on-the-job training : Distinguish between general and specific on-the-job training. Who normally pays for general training? Specific training? Why the difference? Are there any exceptions to these generalizations? Explain.
Their members during the upcoming contract negotiations : Suppose a union that represents some but not all of the employees in an industry is considering a strong push for increased pay for their members during the upcoming contract negotiations. What factors should the union investigate in order to address..
Suppose the price of capital falls relative to the wage rate : Suppose the price of capital falls relative to the wage rate and, as a result, the demand for labor increases. Are these inputs gross substitutes, or are they gross complements? What can you infer about the relative strengths of the output and substi..
In the competitive market for welding services in logan : In the competitive market for welding services in Logan, assume that a > 0 and b > 0 are exogenous variables: a represents the price of a related good, and b represents the number of welders (i.e., sellers) in the market. Describe an economically rea..
The product demand for poultry : The Governor of Arkansas has asked you (her crack economic advisor) to analyze how employment in trucking and poultry processing will be affected if deregulation lowers labor cost in both industries by ten percent. The product demand for poultry is l..
About their jobs after the invention of machines : In England in the early 19th century, skilled knitters began to worry about their jobs after the invention of machines that could produce textiles using unskilled workers. What would have been the expected impact on employment of skilled and unskille..
The market labor demand for specific type of labor : What effect will each of the following have on the market labor demand for a specific type of labor?

Reviews

Write a Review

Business Economics Questions & Answers

  What is his substitution price elasticity

Ernest's income elasticity of demand for natural gas is 0.4. His price elasticity of demand for natural gas is -0.3, and he spends 10% of his income on natural gas. What is his substitution price elasticity?

  Affected by changes in aggregate supply and aggregate demand

Participate in a discussion with your classmates regarding where you see the U.S. economy in its business cycle right now, as based on the economic concepts in the textbook. Review the “EYE on Your Life” caption titled, Using the AS-AD Model, on page..

  Fixed costs for the stand and rent

Hemingway's Hot Dogs sell for $2.00 each. The hot dogs cost Hemingway $0.95 and commissions are $0.15 per hot dog. How many dogs must Hemingway sell if his fixed costs for the stand and rent are $3,500?

  In what ways do future generations benefit from

If deficit spending "crowds out" some private investment, could future generations be worse off? If external financing eliminates crowding out, are future generations thereby protected?

  How many popsicles will be sold each day

elucidate how many popsicles will be sold each day in the short run if the price rises

  Determining the change real economic factors

1) Why is it possible to change real economic factors in the short run simply by printing and distributing more money? 2) Explain why a stable 5% inflation rate can be preferable to one that averages 4% but varies between 1-7% regularly.

  Suppose in a country the real growth rate is 4 and the real

suppose in a country the real growth rate is 4 and the real interest rate is 6.a calculate the constant debt-gdp ratio

  Increase the supply of money at an increasing rate

Suppose the Federal Reserve begins to increase the supply of money at an increasing rate. What impact would that have on GDP, unemployment, and inflation? Would a shift of AD to the right tend to make the equilibrium quantity and price level higher o..

  Draw curve isoquant indicating

A packing company uses two inputs: labor and glue. Suppose the work costs $ 10 / hour (salary) and the glue costs $ 5 / gallon and that the company has a budget of $ 100,000. Draw the line on lined paper isocost for the company. In the same diagram, ..

  Explain why the supply and demand curves in the market

The market in part b is probably most similar to the market for which of the following? (e1) gasoline in NY State during a year; (e2) tablets of a generic medication produced by more than 20 firms during a two-year period; (e3) wholesale fresh tuna o..

  Bureaucracy costs and unspecifiable events-bargaining costs

What is the impact of the following factors on the optimal method of procuring an input. Benefits from specialization. Bureaucracy costs. Opportunism on either side of the transaction. Unspecifiable events. Bargaining costs.

  How do we reconcile both of these observations

The normal supply and demand models take the supply and demand of a particular good and show that the equilibrium price is where the two curves intersect. How do we reconcile both of these observations?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd