An Increase in the Price of a Variable Input Employed

question 63

Multiple Choice

An increase in the price of a variable input employed in a perfectly competitive industry will:

• A)shift the short run industry supply curve up and to the left.
• B)have no effect on supply under fixed proportions production.
• C)reduce the amount produced by each firm in long- run equilibrium.
• D)have no effect on long- run equilibrium price under constant- costs.

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Definitions:

Minimum Wage

The lowest legal hourly pay that employers can pay to workers, set by government policy to ensure a minimum standard of living for employees.

Middle-Class Standard

A socio-economic status that represents a group of individuals who fall between the working class and the upper class within a society, typically characterized by moderate to high income, education, and an ability to afford a comfortable lifestyle.

Price Ceiling

A government-imposed limit on the price charged for a product, aimed at preventing prices from rising above a certain level.

Equilibrium Wage

The earnings rate at which the workforce offered balances the workforce demanded.