If the wage rate doesn't change but a profit-maximizing competitive firm hires fewer workers, we know that
A) the price of the product increased.
B) technical change occurred that increased labor productivity, reducing the firm's demand for labor.
C) demand for the product fell or there has been a reduction in labor productivity.
D) marginal factor cost increased.
C
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Studies show that the income elasticity of demand for wine is approximately five. What does this mean?
A) A 1 percent increase in income leads to a 5 percent increase in wine consumption. B) A 1 percent decrease in the price of wine leads to a 5 percent increase in wine consumption. C) A 5 percent increase in income leads to a 1 percent increase in wine consumption. D) Wine is a relatively elastic good.
Improvements in a country's standard of living are brought about in the long run by
A) technological progress. B) growth in the population. C) constructing more machines and buildings. D) immigration policy.