Question

1.22. Which of the following statements are true about the demand for labour?

a. The long-run demand curve for labour is more inelastic than the short-run demand curve for labour. b. The firm's short-run demand for labour is indicated by the downward sloping VMP curve.

c. An isoquant indicates the various combinations of labour and capital that can be used to produce different levels of production.

d. Isoquants that lie further from the origin of a graph indicate higher levels of production (output). e. A firm's profit will be maximised where an Isocost curve intersects an isoquant.

1] a b d

2] b d

3] c d e

4] b d e

5] a c e

Answer 1

The correct statements are b, d and e only, so the correct answer is [4].