Question 21 (1 point)

The cost of producing a given level of output is minimized:

Question 21 options:

1)	on the inelastic part of the long run labour demand curve.

2)	where the ratio of input prices equals the marginal rate of technical substitution.

3)	where the wage rate equals the slope of the isoquant.

4)	where the ratio of input prices equals the slope of the isocost line.

Question 23 (1 point)

The scale effect refers to

Question 23 options:

1)	firms substituting towards the factor input that has become relative cheaper.

2)	firms wanting to produce more output when a factor price falls.

3)	the demand for labour being upward-sloping when the labour market is competitive.

4)	the firm equating its elasticity of demand for labour to its elasticity of demand for capital.

Question 24 (1 point)

The demand for labour is more elastic:

Question 24 options:

1)	In the long run.

2)	When wages represent a low proportion of total costs.

3)	When it is not easy to change from a labour-intensive to a capital-intensive method of production.

4)	In the short run.

Question 22 (1 point)

The imposition of an effective minimum wage in a non-competitive industry might result in

Question 22 options:

1)	workers earning a lower wage.

2)	more workers being hired.

3)	higher firm profits.

4)	a decrease in labour supply.

5)	an increase in labour demand.