The proportionality rule states that
A) In equilibrium it is not possible to substitute labour for capital and vice versa
B) In equilibrium the marginal rate of substitution must equal the ratio of factor prices
C) Skilled and unskilled labour can be substituted for one another up to the point at which their proportions match their relative wages
D) The optimal combination of factors occurs when marginal physical products are proportional to factor prices.
Correct Answer:
Verified
Q2: The substitution effect
A) Is represented by the
Q3: Manning
A) In a steady state total separations
Q4: The Marshallian rules of derived demand
A) Assume
Q5: Employers may prefer a standard workweek plus
Q6: Capital utilisation will increase if
A) The rate
Q7: Walter Oi regarded labour as a quasi
Q8: Labour hoarding
A) Implies a sub-optimal use of
Q9: The reservation wage is
A) That wage which
Q10: The matching function
A) Relates the number of
Q11: The optimal stopping rule in job search
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