If the costs of labor and capital increase in the same proportion, the isocost line will
A) stay the same.
B) shift outward in a parallel fashion.
C) rotate inward around the point where only capital is employed in production.
D) shift inward in a parallel fashion.
B
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A change in ________ creates a movement along the aggregate demand curve but does not shift the aggregate demand curve
A) tax rates B) the price level C) fiscal policy D) None of the above because they all shift the aggregate demand curve.
Why does the NPV of a college education tend to be positive but relatively small?
A) College students tend to be young and poor, so their opportunity cost of capital is high. B) College graduates typically have limited on-the-job skills, so their initial returns from the education investment tend to be small. C) There are few barriers to entry for a college education. D) Most of these studies are based on nominal interest rates, so the NPV is smaller than we would achieve under real interest rates.