What Do Economists Mean by the Term "Sticky Wage

question 75

Multiple Choice

What do economists mean by the term "sticky wage"?

• A)It refers to the reluctance by employers to increase nominal wages during an inflationary period.
• B)It refers to a wage that is slow to adjust to its equilibrium level, creating sustained periods of shortage or surplus in the labor market.
• C)It refers to a breakdown in wage negotiations between employers and employee unions.
• D)It refers to a union negotiated wage.

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Definitions:

Manufacturing Overhead

All indirect costs associated with the production process, including costs related to running the manufacturing facilities that are not directly traceable to specific units of product.

Underapplied

Refers to the situation where the actual manufacturing overhead costs are greater than the overhead costs applied to products based on the predetermined overhead rate.

Unit Product Cost

The total cost to produce one unit of a product, including direct materials, direct labor, and allocated overhead.

Job-Order Costing

An accounting method that tracks manufacturing costs separately for each job or batch of products.