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stealth61 [152]
2 years ago
14

Use the neoclassical theory of distribution to predict the impact on the real wage and the real rental price of capital of each

of the following events:A. A (one-time) wave of immigration increases the labor force.
B. An earthquake destroys part of the capital stock.
C. A technological advance improves production.
D. High inflation doubles the price of all factors of production and output.
Business
1 answer:
Troyanec [42]2 years ago
4 0

Answer:

a. A (one-time) wave of immigration increases the labor force.

According to neoclassical economists, real wage = marginal product of labor. As more labor is available, the marginal product of labor will decrease (law of diminishing marginal returns). Therefore, since the marginal product of labor decreases, the real wages will also decrease.

Since there is more labor available, even though the capital stock remains the same, total output should increase. As total output increases, the real rental price of capital (interest) will increase.

b. An earthquake destroys part of the capital stock.

According to neoclassical economists, real rental price of capital = marginal product of capital. A decrease in the capital stock will result in an increase in the marginal product of capital. This will increase the real rental price of capital.

Since the capital stock decreases, additional labor will produce less additional output, reducing the marginal product of labor. Since the marginal product of labor decreases, the real wage will decrease also.

c. A technological advance improves the production.

Technological improvements generally increase both marginal product of labor and marginal product of capital, therefore, real wages will increase and real rental price of capital will also increase.

d. High inflation doubles the price of all factors of production and output.

Inflation rate has no effect on real wages and real rental price of capital. The effects are only on nominal wages and nominal rental price of capital.

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Answer:

  • Low supply
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Explanation:

When suppliers under invest in their business, they will end up having the capacity to only produce less than the market requires. Should this happen, supply will be reduced in the market which would lead to relative scarcity all else being equal.

For economic growth to happen, there must be increasing production in an economy so if suppliers are under investing and production is low, there might be low or no economic growth.

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As lynn is working on writing the text that will be incorporated into a new magazine ad for her company’s line of handbags, she
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As Lynn is working on writing the text that will be incorporated into a new magazine ad for her company’s line of handbags, she is engaging in the encoding stage of the communication process.

<h3><u>What is encoding?</u></h3>
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  • The encoder must ascertain how the audience will interpret the message and make necessary changes to ensure that the audience interprets the message as intended.
  • Encoding is the process of converting ideas into language. The message is transmitted by the encoder using a "medium" such a phone call, email, text message, in-person meeting, or other communication method.

Different signals require different levels of conscious thought when they are encoded. The encoder should also care for any "noise"—such as other messages, distractions, or influences—that could obstruct their message.

Know more about encoding with the help of the given link:

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7 0
1 year ago
A company that sells running shoes online wants to compare two new marketing strategies. They will test the strategies on 10 wee
PIT_PIT [208]

Answer:

The explanation of the three factors and they conclusion are below.

Explanation:

To begin with, when we talk about experimental units we refer to the entities that the researcher looks forward to make inferences about, so that means that in this case the experimental units of the situation will be all the people who got to visit the website in both schedules, the morning shift and the afternoon shift.

Secondly, the treatments is understood to be the process or the way, it could be said, that the researchers administrate to the experimental units. So that implicates that in this case the treatments will be the morning with its comfort described and the afternoon on the other side with its discounted prices shown.

Finally, the most probable outcomes for this experiments will be that the statics will show how the people interact with the variables and which of them generated more interest, that being either price or comfort. It will also show the behavior of the people when it comes to understand if the tend more to visit the web site at morning or afternoon.

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2 years ago
On October 1, Black Company receives a 10% interest-bearing note from Reese Company to settle a $22,200 account receivable. The
lorasvet [3.4K]

Answer:

$555

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The computation of the interest revenue is shown below:

= Account receivable  × rate of interest × number of months ÷ (total number of months in a year)

= $22,200 × 10% × (3 months ÷ 12 months)

= $2,220 × (3 months ÷ 12 months)

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