Suppose at the Going Wage Rate of $20 Per Hour

question 221

Multiple Choice

Suppose at the going wage rate of $20 per hour, firms can hire as many hours of janitorial services as they desire.If any firm tries to lower the wage rate to $19, it will not be able to hire any janitor.What does this indicate about the supply curve for janitorial services?

• A)Supply is unit-elastic.
• B)Supply is perfectly elastic.
• C)Supply is perfectly inelastic.
• D)Supply is relatively inelastic.

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Definitions:

Direct Materials

Raw materials that are directly used in the production of a product and can be easily traced back to the product.

Product Cost

The total amount of costs directly assigned to the creation of a product, including materials, labor, and overhead.

Operating Expenses

All the costs associated with the day-to-day operations of a business, excluding the direct costs of producing goods and services.

Current Liabilities

Short-term financial obligations that are due within one year or within the normal operating cycle of a business, including accounts payable, short-term loans, and taxes payable.