The output effect of a change in the wage rate on a firm's demand for labor input will be greater
a. the larger the share of labor costs in total costs and the greater the price elasticity of demand for output.
b. the larger the share of labor costs in total costs and the smaller the price elasticity of demand for output.
c. the larger the share of labor costs in total costs and the higher the quantity demanded.
d. the smaller the possibilities of substituting capital for labor.
a
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In the regression model Yi = ?0 + ?1Xi + ?2Di + ?3(Xi × Di) + ui, where X is a continuous variable and D is a binary variable, ?2
A) is the difference in means in Y between the two categories. B) indicates the difference in the intercepts of the two regressions. C) is usually positive. D) indicates the difference in the slopes of the two regressions.
Suppose Embryonica is an LDC with few skilled workers, a primitive banking system, and very little electric power. What do we know for sure that Embryonica is lacking?
a. Infrastructure. b. Political stability. c. Agricultural sector. d. Traditional values. e. Poverty.