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Suppose Capital and Labor Must Be Used in Fixed Proportions

Question 4

Multiple Choice

Suppose capital and labor must be used in fixed proportions to produce widgets and that the price elasticity of demand for widgets is zero.Then the wage elasticity of demand for labor by widget makers will be:


A) +1.
B) Suppose capital and labor must be used in fixed proportions to produce widgets and that the price elasticity of demand for widgets is zero.Then the wage elasticity of demand for labor by widget makers will be: A) +1. B) 1) C) 0. D) infinite.
1)
C) 0.
D) infinite.

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