If, as Some Economists Believe, Changes in Technology Over Recent

question 103

Multiple Choice

If, as some economists believe, changes in technology over recent decades have brought about changes in labor markets, then those changes likely have resulted in

• A)reduced emphasis on compensating differentials as an explanation for wage differences.
• B)a reduced emphasis on human-capital differences among workers as an explanation for wage differences.
• C)a narrowing of the earnings gap between high-skilled workers and low-skilled workers.
• D)a widening of the earnings gap between high-skilled workers and low-skilled workers.

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Definitions:

Fixed Expenses

Costs that do not fluctuate with changes in production level or sales volume, such as rent, salaries, and insurance.

Variable Costing

An accounting method that includes only variable production costs (direct materials, direct labor, and variable manufacturing overhead) in product costs.

Fixed Manufacturing Overhead

is the sum of all the production costs that do not change with the level of output, including costs like factory rent, salaries of permanent employees, and depreciation of factory equipment.

Direct Labour

Labor of employees engaged directly in the manufacturing process or production work, essential for creating the product.