Use the Figure Below to Answer the Following Questions

question 65

Multiple Choice

Use the figure below to answer the following questions. Figure 18.3.1
-Refer to Figure 18.3.1.Choose the correct statement.

• A)The elasticity of demand for high-skilled labourers is less than the elasticity of demand for low-skilled labourers.
• B)High-skilled labourers receive a lower wage than low-skilled labourers.
• C)High-skilled labourers receive a greater wage than low-skilled labourers.
• D)The vertical distance between the two demand curves is the compensation for the cost of acquiring human capital.
• E)The vertical distance between the two curves is the present value of human capital.

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Definitions:

Signalling Theory

A concept in economics and finance suggesting that one party credibly conveys some information about itself to another party.

Investment Opportunities

Options available to individuals or entities to invest capital with the expectation of a future financial return.

Dividend Reinvestment Plans

Investment plans that allow shareholders to automatically reinvest their cash dividends in additional shares of the company's stock, usually without commission.

Strict Residual Dividend Policy

A dividend policy in which dividends are based on the earnings left over after all operating expenses, taxes, and project investments are covered.