Suppose the government grants child care subsidies to mothers entering the labor force. What is likely to happen to the equilibrium wage and quantity of labor?
A) The equilibrium wage rises and the equilibrium quantity of labor falls.
B) The equilibrium wage falls and the equilibrium quantity of labor rises.
C) The equilibrium wage and the equilibrium quantity of labor fall.
D) The equilibrium wage and the equilibrium quantity of labor rise.
Question 2
The marginal rate of technical substitution is measured by
A) the relative input prices.
B) the slope of the isocost line.
C) the slope of the isoquant.
D) the ratio of the product's price to the product's cost of production.