Reducing Long-Run Labor Usage

question 51

Multiple Choice

Reducing Long-Run Labor Usage

The following questions refer to the accompanying diagram, which shows a firm reducing its long-run labor usage from L0 to L1 in response to an increase in the wage rate.


-Refer to Reducing Long-Run Labor Usage.The substitution effect of the wage change is the movement from point X to

• A) point A.
• B) point B.
• C) point C.
• D) point D.

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