Question

2PF-PC The unit cost of producing one yard of cloth and one calorie of food as a function of the price of one machine-hour, r, is r=\frac{2P_F - P_C}{4} 3PC-2PF The unit cost of producing one yard of cloth and one calorie of food as a function of the price of one work-hour, w, is w = \frac{3P_C - 2P_F}{4} c. What happens to those factor prices when the price of cloth falls? A decrease in the price of cloth will cause the rental rate of capital to A. fall and the wage rate of laborers to rise, leading to less production of cloth and a decrease in demand for the factor it uses intensively-capital. B. rise and the wage rate of laborers to fall, leading to greater production of cloth and an increase in demand for the factor it uses intensively-labor. C. fall and the wage rate of laborers to rise, leading to greater production of cloth and an increase in demand for the factor it uses intensively-capital. D. rise and the wage rate of laborers to fall, leading to less production of cloth and a decrease in demand for the factor it uses intensively-labor.

          2PF-PC
The unit cost of producing one yard of cloth and one calorie of food as a function of the price of one machine-hour, r, is r=\frac{2P_F - P_C}{4}

3PC-2PF
The unit cost of producing one yard of cloth and one calorie of food as a function of the price of one work-hour, w, is w = \frac{3P_C - 2P_F}{4}
c. What happens to those factor prices when the price of cloth falls?
A decrease in the price of cloth will cause the rental rate of capital to
A. fall and the wage rate of laborers to rise, leading to less production of cloth and a decrease in demand for the factor it uses intensively-capital.
B. rise and the wage rate of laborers to fall, leading to greater production of cloth and an increase in demand for the factor it uses intensively-labor.
C. fall and the wage rate of laborers to rise, leading to greater production of cloth and an increase in demand for the factor it uses intensively-capital.
D. rise and the wage rate of laborers to fall, leading to less production of cloth and a decrease in demand for the factor it uses intensively-labor.

2PF-PC
The unit cost of producing one yard of cloth and one calorie of food as a function of the price of one machine-hour, r, is r=(2PF - PC)/(4)

3PC-2PF
The unit cost of producing one yard of cloth and one calorie of food as a function of the price of one work-hour, w, is w = (3PC - 2PF)/(4)
c. What happens to those factor prices when the price of cloth falls?
A decrease in the price of cloth will cause the rental rate of capital to
A. fall and the wage rate of laborers to rise, leading to less production of cloth and a decrease in demand for the factor it uses intensively-capital.
B. rise and the wage rate of laborers to fall, leading to greater production of cloth and an increase in demand for the factor it uses intensively-labor.
C. fall and the wage rate of laborers to rise, leading to greater production of cloth and an increase in demand for the factor it uses intensively-capital.
D. rise and the wage rate of laborers to fall, leading to less production of cloth and a decrease in demand for the factor it uses intensively-labor.

Added by Mathew A.

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