A temporary supply shock, such as a drought, would:
A. increase the marginal product of capital and increase the desired investment.
B. decrease the marginal product of capital and decrease the desired investment.
C. have little or no effect on the desired investment.
D. decrease both the marginal product of capital and the marginal product of labor in the long-term future.
A temporary supply shock, such as a drought, would:
A. increase the marginal product of capital and increase the desired investment.
B. decrease the marginal product of capital and decrease the desired investment.
C. have little or no effect on the desired investment.
D. decrease both the marginal product of capital and the marginal product of labor in the long-term future.
Related textbook solutions
Related questions
The labor supply curve shift following a decrease in the capital stock is a result of _____________.
A. intertemporal substitution of leisure
B. a negative income effect
C. consumption smoothing
D. a positive income effect
When current total factor productivity increases:
A. firms sell capital because the remaining capital is more productive
B. firms hire more workers because the marginal product of labor increases.
C. firms hire fewer workers because the remaining workers are more productive
D. firms increase investment because the marginal product of capital increases
Which of the following correctly explains why the labor demand curve doesn't shift following an increase in government spending?
| A. There is no substitution effect. B. There is no income effect. C. There is no change in the wage rate D. There is no change in the marginal product of labor. |
All else constant, an increase in productivity has the effect of causing:
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both the marginal and average product of labor to increase. |
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the marginal product of labor to increase and the average product of labor to decrease. |
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the marginal product of labor to increase and no effect on the average product of labor. |
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the average product of labor to increase and no effect on the marginal product of labor |
