A Firm's Demand for Labor

question 202

Multiple Choice

A firm's demand for labor

• A) increases when the price of the firm's output falls.
• B) decreases when the price of the firm's output falls.
• C) decreases when the wage rate decreases.
• D) always increases when the prices of other factors fall.

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Definitions:

Testable Explanation

A hypothesis or theory that can be put to the test, designed to explain phenomena in the natural world.

Hypothesis

An initial hypothesis put forward to explain a phenomenon that serves as a basis for further study and can be verified by experimental and observational means.

Scientific Theory

A well-substantiated explanation of some aspect of the natural world, based on a body of evidence and repeatedly tested hypotheses.

Testable Explanation

A hypothesis that can be supported or refuted through experimentation or observation.