If a large increase in the wage rate leads to a net increase in the use of capital by a firm, then
A. the substitution effect outweighed the output effect.
B. the output effect outweighed the substitution effect.
C. the substitution and output effects are equal.
D. there is no way to estimate the relative size of the substitution and output effect.
A. the substitution effect outweighed the output effect.
You might also like to view...
The global financial crisis showed the need for increased financial regulation, however, too much or poorly designed regulation could
A) choke off financial innovation. B) increase the efficiency of the financial system. C) increase economic growth. D) increase international financial integration.
Total consumer surplus is measured as the area:
A. beneath the market price and above the supply curve. B. above the demand curve. C. between the demand curve and the supply curve. D. beneath the demand curve and above the market price.