A storm destroys several factories, reducing thestock of capital. What effect does this event have onfactor markets?a. Wages and the rental price of capital both rise.b. Wages and the rental price of capital both fall.c. Wages rise and the rental price of capital falls.d. Wages fall and the rental price of capital rises.

A storm destroys several factories, reducing thestock of capital. What effect does this event have onfactor markets?a. Wages and the rental price of capital both rise.b. Wages and the rental price of capital both fall.c. Wages rise and the rental price of capital falls.d. Wages fall and the rental price of capital rises.

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter11: Resource Markets

Section: Chapter Questions

Problem 4QFR

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Question

A storm destroys several factories, reducing the
stock of capital. What effect does this event have on
factor markets?
a. Wages and the rental price of capital both rise.
b. Wages and the rental price of capital both fall.
c. Wages rise and the rental price of capital falls.
d. Wages fall and the rental price of capital rises.

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