Suppose a firm can only vary the quantity of labor hired in the short run. An increase in the cost of capital will
A) increase the firm's marginal cost.
B) decrease the firm's marginal cost.
C) have no effect on the firm's marginal cost.
D) More information is needed to answer the question.
C
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Which of the following is a critical element of the Heckscher-Ohlin model?
A) That different goods display different factor intensities in their production. B) That some countries have no comparative advantage in anything. C) That trade may not be beneficial. D) All of the above.
Which of the following statements about taxation is TRUE?
A) Increasing taxes will always increase tax revenues. B) Static tax analysis recognizes that an increase in taxation could lead to a decrease in tax revenues. C) Dynamic tax analysis assumes that an increase in taxation will leave the tax base unchanged. D) There is a tax rate at which tax revenues are maximized.