Recently, a Teachers' Union Argued That the Standard of Living

question 212

Multiple Choice

Recently, a teachers' union argued that the standard of living of teachers working for the school district was falling.The negotiating team for the school board replied that this was not true because the teachers had received significant increases in nominal income through collective bargaining.Could the union statement be correct?

• A)No, because real income may rise if price increases are proportionately greater than the increases in nominal income.
• B)Yes, because real income may fall if price increases are proportionately smaller than the increases in nominal income.
• C)Yes, because real income may fall if price increases are proportionately greater than the increases in nominal income.
• D)No, because real income may rise if price increases are proportionately greater than declines in nominal income.

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Definitions:

Volume-Based

A pricing or costing approach where prices or costs are determined based on the quantity of goods or services produced or sold.

Pricing Errors

Instances where the listed price of a good or service differs from the intended or market appropriate price due to typographical, calculation, or understanding errors.

Excess Capacity

A situation where a company can produce more than is required to meet the demand, often leading to inefficiencies and increased costs.

Bidding Strategy

An approach used by businesses or individuals when competing for contracts or projects, involving how they price their bids to win the work while aiming to maximize profits.