When Will the Scale Effect of a Wage Increase Cause

question 24

Multiple Choice

When will the scale effect of a wage increase cause a fall in the amount of labor employed?

• A) Always.
• B) When labor is not a regressive factor.
• C) When labor and capital are substitutes in production.
• D) When labor and capital are complements in production.

---

Definitions:

Relationship Satisfaction

The degree to which individuals feel fulfilled and content within their romantic, familial, or platonic relationships.

Constant

A situation or state of affairs that does not change.

Investment Model

Theory that uses three factors—satisfaction, alternatives, and investments—to explain why people stay with their long-term relationship partners.

Sunk Costs

Costs that have already been incurred and cannot be recovered, which should not influence future decisions but often do.