Given a 10 Percent Increase in Wages, Firm a Cuts

question 114

Multiple Choice

Given a 10 percent increase in wages, firm A cuts back on labor more than firm B. It follows that, ceteris paribus,

• A)firm A likely has a higher labor cost-total cost ratio than firm B.
• B)firm B likely has a higher labor cost-total cost ratio than firm A.
• C)the elasticity of demand for labor is likely higher for firm B than firm A.
• D)firm B likely has higher fixed costs than firm A.
• E)firm A likely has higher per-unit costs than firm B.

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Definitions:

Case Management

A collaborative process of assessment, planning, facilitation, and advocacy for options and services to meet an individual's holistic needs through communication and available resources to promote quality cost-effective outcomes.

HMO

A Health Maintenance Organization, a type of health insurance plan that limits coverage to care from doctors who work for or contract with the HMO.

Medical History

A record of a person's past illnesses, surgeries, treatments, and health conditions, often used by healthcare providers for diagnosis and treatment planning.

Health Care Costs

The expenses associated with medical services, treatments, and procedures provided to maintain or improve a person’s health.