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- Subject
- Production Factorseconomics-mcqs › production-factors
- Published
- 30 May 2019
- Last updated
- 28 May 2026
Explanation
Reducing the number of tractors available typically leads to higher tractor rental prices (A), lowers the rental value of farmland due to decreased productivity (B), and reduces the marginal product value of tractors (C). However, it does not cause farm workers' wages to rise (D), as labor demand may not increase in this scenario.
More Production Factors MCQs
Practice related questions from the same subject.
- 1.Imagine a war fought using biological weapons that eliminate human labor but leave physical capital intact. Compared to the pre-war period, what changes would you expect in the equilibrium wages and rental prices after the conflict?
- 2.How does a rise in automobile prices affect the demand for autoworkers?
- 3.At what point should a profit-driven competitive firm continue to employ additional workers?
- 4.Why does the demand curve for an individual firm's factor of production slope downward?
- 5.How does a reduction in the number of fishermen affect the market for capital goods, such as fishing boats, in the fishing sector?
- 6.In a perfectly competitive market, the value of the marginal product of capital represents the firm's what?
- 7.What happens to the additional output when a factor shows diminishing marginal returns as more units are employed?
- 8.When capital is held by a company rather than directly by households, which of the following is NOT a form of capital income?
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