An Increase in the Wage Rate Will Have a Greater

question 22

Multiple Choice

An increase in the wage rate will have a greater effect on average costs

• A) the larger the proportion labour costs are of total costs and the easier it is to substitute capital for labour.
• B) the larger the proportion labour costs are of total costs and the harder it is to substitute capital for labour.
• C) the greater the diminishing marginal product of labour is.
• D) the greater returns to scale are.

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Definitions:

Sample Size

The number of observations or data points used in a study or experiment.

Confidence Level

The probability with which a statistical estimate can be expected to contain the true parameter value.

Confidence Interval

A band of values calculated from sample statistics, expected to enclose the value of a yet-to-be-identified population parameter.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, indicating how much individual data points deviate from the mean.