When Estimating a Labor Demand Function, One Needs to

question 22

Multiple Choice

When estimating a labor demand function, one needs to

• A) assume labor demand is equal across states.
• B) assume labor demand is equal across industries.
• C) labor supply is perfectly elastic.
• D) find an instrument (e.g., policy) that shifts labor demand over time or location.
• E) find an instrument (e.g., policy) that shifts labor supply over time or location.

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Definitions:

Norway

A Scandinavian country known for its vast landscapes, fjords, and high living standards.

Karl Marx

A 19th-century philosopher, economist, and political theorist known for his critical theories about capitalism and his influence on the development of socialist and communist movements.

Capitalist

A person who supports or engages in the principles of capitalism, a system where trade, industries, and the means of production are largely or entirely privately owned and operated for profit.

Invisible Hand

A metaphor introduced by Adam Smith to describe the self-regulating nature of the market economy driven by individuals' pursuit of their own interests.