1. Explain the impact of each of the events on the location of a firm's long-run expansion path. assume that labor is plotted on the horizontal axis and "other inputs" are plotted on the vertical axis.
a. the entrepreneur chooses inputs to maximize output achieved for each level of cost.
b. the wage rate increases; the prices of all other factors of production remain constant.
c. the owner of the firm is a bigot who believes that white-male protestant workers are always more productive than women, blacks, jews, and catholics.
d. due to the introduction of educational vouchers a generation earlier, the local school system is graduating students with 50% more of the skills that the employer formerly had to train.
e. as the workers gain experience, their productivity increases.