If unskilled labor and robotics are substitutes in production a decrease in the price of robotics is predicted to a. decrease the demand for unskilled labor if the scale effect outweighs the substitution effect. b. decrease the demand for unskilled labor if the substitution effect outweighs the scale effect. c. unambiguously increase the demand for unskilled labor. d. unambiguously decrease the demand for unskilled labor.
Question: 1
If unskilled labor and robotics are substitutes in production a decrease in the price of robotics is predicted to
a. decrease the demand for unskilled labor if the scale effect outweighs the substitution effect.
b. decrease the demand for unskilled labor if the substitution effect outweighs the scale effect.
c. unambiguously increase the demand for unskilled labor.
d. unambiguously decrease the demand for unskilled labor.
Question: 2
Assuming capital is fixed in the short run and variable in the long run what would likely happen to wages in the short and long run following a wave of immigration?
a. a large decrease in the short run, followed by a smaller decrease in the long run
b. a small decrease in the short run followed by a larger decrease in the long run
c. an increase in the short run followed by a large decrease in the long run
d. a decrease in the short run followed by an increase in the long run
Question: 3
Which of the following would unambiguously predict a increase in desired hours of work?
a. The substitution effect of a wage decrease
b. The income effect of a wage decrease
c. A wage increased
d. The substitution effect of a decline in income tax rates
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