According to the Job-Rationing Explanation of Unemployment

question 13

Multiple Choice

According to the job-rationing explanation of unemployment,

• A)there is an excess supply of labor at the prevailing wage.
• B)the prevailing wage is higher than the equilibrium wage.
• C)the amount employed depends on the demand for labor at the prevailing wage.
• D)All of these
• E)None of these

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Definitions:

Long-run Average Total Cost

The cost per unit of output in which all inputs, including capital, are variable, showing economies and diseconomies of scale over time.

Increasing Returns to Scale

A situation in which a proportional increase in all inputs results in a more than proportional increase in output, demonstrating economies of scale.

Law of Diminishing Returns

An economic principle stating that, holding all else constant, as one input variable is increased, there is a point at which the marginal per unit output starts decreasing.