The demand for capital is similar to the demand for labor in that
A) both are inelastic at high prices and elastic at low prices.
B) both are derived demands.
C) the marginal product of labor is derived from the marginal product of capital.
D) the marginal revenue product curve for labor is the same as the marginal revenue product curve for capital.
B
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According to Keynesian analysis, if government expenditures and taxes are increased by the same amount, which of the following will occur?
A) Aggregate supply will decrease B) Aggregate supply will increase C) Aggregate demand will be unaffected D) Aggregate demand will decrease E) Aggregate demand will increase
A linear demand for lake front cabins on a nearby lake is estimated to be: QD = 900,000 - 2P. What is the point price elasticity for lake front cabins at a price of P = $300,000? [HINT: Ep = (?Q/?P)(P/Q)]
a. EP = -3.0 b. EP = -2.0 c. EP = -1.0 d. EP = -0.5 e. EP = 0