Exhibit 7-19
-In Exhibit 7-19, the rotation from AC to AB reflects a(n)
A) increase in the price of labor
B) increase in the price of land
C) decrease in the price of labor
D) decrease in the price of land
E) increase in the amount the producer can spend

Question

Exhibit 7-19 
-In Exhibit 7-19, the rotation from AC to AB reflects a(n)
A) increase in the price of labor 
B) increase in the price of land 
C) decrease in the price of labor 
D) decrease in the price of land 
E) increase in the amount the producer can spend

Quizplus · Accepted Answer

The rotation from AC to AB reflects a decrease in the price of labor. This is because the slope of the line AB is steeper than the slope of the line AC, indicating that the relative price of labor has decreased in comparison to the relative price of land.

Exhibit 7-19 -In Exhibit 7-19, the Rotation from AC to AB Reflects