Question
Indicate whether the following statements are true, false or uncertain and briefly explain why. Use formulas or graphs d. A low elasticity of substitution between
Indicate whether the following statements are true, false or uncertain and briefly explain why. Use formulas or graphs
d. A low elasticity of substitution between K and L means that relative prices of capital and labor (w/v) need to change by a small amount to change the ratio of (K/L) by a large amount.
e. In the simple two-input case more labor is hired when the wage rate falls but, how capital usage responds to wage change is indeterminate.
b. To employ a factor of production efficiently a firm will set the value of the marginal product of each factor equal to the relevant price of the factor to the firm.
please use Simple graphs to explain
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