Suppose the price of leather used to produce shoes increases. The higher price of leather ________ the supply of shoes and the supply curve of shoes ________

Assume a firm uses two inputs, capital and labor. All else constant, an increase in the price of labor would create an incentive for the firm to:

A) substitute labor for capital in its production function. B) substitute capital for labor in its production function. C) hire more capital and labor. D) hire less capital while holding the amount of labor employed constant.

When people invest, they face a trade-off between which of the following?

a. a higher risk and higher return or a lower risk and lower return b. a higher risk and lower return or a lower risk and high return c. a higher risk and no change in the rate of return d. the price and the interest rate