When an Industry's Demand Curve for Labor Is Derived from the Individual

question 20

Multiple Choice

When an industry's demand curve for labor is derived from the individual firms' demand curves,what complication must be taken into account?

• A) Adjustments in the amount of capital employed.
• B) The factor-price effect.
• C) Changes in the price of the firms' product.
• D) Monopsony power.

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Definitions:

Labor-intensive Products

Goods that require a relatively high amount of labor to produce, compared to the amount of capital required.

Gini Coefficient

A measure of income inequality within a population, ranging from 0 for perfect equality, to 1 for maximal inequality.

Developing Nations

Countries with a lower living standard, underdeveloped industrial base, and low Human Development Index relative to other countries.

Wealthy

Having a substantial amount of money, resources, or assets; rich.