The Elasticity of Labor Demand Is Higher When

question 47

Multiple Choice

The elasticity of labor demand is higher when:

• A) there are many substitutes for labor in the production process.
• B) the inputs that could be substituted for labor are relatively expensive.
• C) a large amount of labor is essential to the production process.
• D) labor productivity falls rapidly when output is increased.

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Definitions:

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The price paid for the temporary use of a good, service, or property owned by another entity.

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Resources or assets used in the production of goods and services.

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