An Increase in the Demand for Peanut Butter Could Be

question 149

Multiple Choice

An increase in the demand for peanut butter could be caused by a(n)

• A)decrease in consumer income
• B)increase in the supply of peanut butter
• C)decrease in the price of bread
• D)drought in Georgia that destroyed 30 percent of the peanut crop
• E)decrease in the price of bologna

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Definitions:

Compensating Differential

The compensating differential is the difference in wages that arises to offset the non-monetary characteristics of different jobs, such as riskiness or unpleasantness.

Wage Disparity

The difference in wages earned by different groups of workers, often due to factors like gender, education, or ethnicity.

Equilibrium Wage

The wage rate at which the quantity of labor supplied equals the quantity of labor demanded in the market.

Efficiency Wage

A higher wage paid by employers to increase productivity by attracting better applicants, reducing turnover, and motivating employees.