If the Cost Efficiency of Labor Equals 2,then

question 22

Multiple Choice

If the cost efficiency of labor equals 2,then

• A)Labor costs 100 percent more than the revenue it generates.
• B)The wage rate is 100 percent more than the product price.
• C)Each extra dollar spent on wages returns 2 units of additional output.
• D)The product price is 200 percent of the wage rate.

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Definitions:

Autarky

National self-sufficiency; no economic interaction with foreigners.

Opportunity Cost

The value of the best alternative that is forgone in making any choice or decision.

Terms of Trade

The ratio between a country's export prices and its import prices, indicating the quantity of imports goods a country can purchase through the sale of its exports.

Supply and Demand

Fundamental economic model describing how prices vary as a result of a balance between product availability and consumers' purchasing desires.