What will be the net or total effect of the decline

Reference no: EM13207300

Suppose that there is a decline in the cost of a unit of capital. In the long run:

a.) What will be the substitution effect of this change on use of capital and labor, and why?How would this be shown on an isoquant diagram? (a diagram isnt needed, just an explanation.)

b.) What will be the scale effect of this change on use of capital and labor and why? How would this be shown on an isoquant diagram? ( a diagram isnt needed here either.)

c.)What will be the net or total effect of this decline in the cost of capital on the use of capital and labor?

Reference no: EM13207300

Questions Cloud

A correctly identify the empirical formula of the new oxide : converted completely to another molybdenum oxide by adding oxygen. The new oxide has a mass of 17.63 g. Add subscripts below to correctly identify the empirical formula of the new oxide.

How to apply the formula for the area of a triangle : The price at point a is $70 and the price at point c is $10 per bag. The price at point d is $56 and the price at point e is $31 per bag. The price at point f is $67 and the price at point g is $32 per bag. Apply the formula for the area of a trian..

Significant role in the transformation : The use of gunpowder changed the nature of warfare and played a significant role in the transformation of European Society. Yet in China, its land of origin, gunpowder did not have this effect.

Find the equilibrium concentrations : determine the equilibrium concentrations of all three compounds if the starting concentrations of both reactants are .00408 M, wiht [HOCl]=0.000 M.

What will be the net or total effect of the decline : Suppose that there is a decline in the cost of a unit of capital. In the long run a.) What will be the substitution effect of this change on use of capital and labor, and why How would this be shown on an isoquant diagram (a diagram isnt needed, j..

State glycerol can form multiple hydrogen bonds with water : 2-Methyl-1-propanol is more soluble in water than is glycerol because 2-methyl-1-propanol forms fewer hydrogen bonds with water. Glycerol is more soluble in water than is 2-methyl-1-propanol because glycerol can form multiple hydrogen bonds with wate..

Compute the z for the fourth ionization of ti : Calculate the Z for the fourth ionization of Ti when it requires 425.6 kJ of energy to ionize 0.185 moles of Ti^3+ to Ti^4+ ( The electron being removed is in the outermost valence orbital of Ti^3+ ground state, therefore n = 3)

Explain what was the growth rate of the population : 2008 2009 Population 800,000 808,000 Number of hours worked 2,000,000,000 2,000,000,000 Real gdp 12,000,000,000 12,362,400,000 Real gdp per capita Labor productivity What was the growth rate of the population between 2008 and 2009

What is the purpose of international relations : What is the purpose of International Relations theory and what is the purpose of the state - describe the difference between scientific realism and transactional social constructionism

User Account

All Pages