What happens to wage and rental rate according to the Heckscher-Ohlin model if the price of a good that uses capital extensively increases by 6%?
a. Both wage and rental rate decrease by 6%.
b. Both wage and rental rate increase by less than 6%.
c. Both wage and rental rate increase by more than 6%.
d. Wage rate increases by more than 6% but rental rate decreases.
e. Wage rate decreases but rental rate increases more than 6%.
e. Wage rate decreases but rental rate increases more than 6%.
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The quantity of raspberries sold at a local store increases from 100 pints to 1,500 pints when the price is reduced from $4.00 to $1.00. In this situation, the absolute price elasticity of demand for raspberries is approximately
A) 0.69. B) 6.7. C) 1.46. D) 4.3.
Mike is maximizing utility by working 10 hours a week and studying 10 hours a week. Mike has only 20 hours to devote to either working or studying. If Mike realizes that another hour of studying will improve his grade on an exam, thus raising the utility of another hour of study, Mike will:
A. work fewer hours, shifting his labor supply curve to the left. B. study less to raise the marginal utility of studying even more. C. work fewer hours, moving him down along his labor supply curve. D. substitute work for studying, raising his total utility.