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Assume the price of capital doubles and, as a result, firms make no change in the relative quantities of capital and labor they employ. This implies that

Sagot :

Assume the price of capital doubles and, as a result, firms make no change in the relative quantities of capital and labor they employ. This implies that: A) labor is not readily substitutable for capital.

  • Energy and labor, as well as capital and labor, are complementary, whereas capital and energy are not.
  • These findings support the US time series research by Hudson and Jorgenson (1974) and Berndt and Wood (1975), however they are in conflict with the global cross-section analysis by Griftin and Gregory (1976).
  • As the capital stock grows, the marginal product of labor also rises.
  • Replacing employees with machines in an effort to boost productivity and lower production unit costs. This can result in persistent unemployment.

What is the relationship between capital and labor?

  • Labor needs supplies to work with, as well as shelter, tools, machinery, and other productive tools, in order to produce successfully.

These all require capital, which is a collection of prior earnings.

Learn more about capital and labor brainly.com/question/14655875

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