Labor Market Comparisons Are More Important Than Product Market Comparisons

question 83

Multiple Choice

Labor market comparisons are more important than product market comparisons when

• A)product demand is elastic.
• B)the costs of recruiting replacements are low.
• C)attracting and retaining qualified employees is difficult.
• D)the supply of labor is inelastic.
• E)employee skills are specific to the product market.

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Definitions:

Short Run

A period in economics during which at least one factor of production is fixed, limiting the adjustment processes of the economy.

Production Function

A mathematical representation of the relationship between inputs used in production and the output generated.

Returns to Scale

The rate at which output increases as inputs are proportionally increased in the production process.

Production Function

A Production Function describes the relationship between inputs used in production and the output resulting from their use, showing how output changes as inputs change.