If the Nominal Wages of Carpenters Rose by 5 Percent

question 56

Multiple Choice

If the nominal wages of carpenters rose by 5 percent in 2019 and the price level decreased by 3 percent, then the real wages of carpenters

• A)decreased by 2 percent.
• B)increased by 8 percent.
• C)increased by 2 percent.
• D)increased by 5 percent.

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Definitions:

Average Variable Cost

The total variable cost of production divided by the quantity of output produced, reflecting the cost per unit of output.

Market Price

The present cost for purchasing or selling an asset or service in a market environment.

Purely Competitive Market

A theoretical market structure where numerous buyers and sellers trade homogeneous products, ensuring no single participant can influence market prices.

Average Total Cost

The sum of all production costs (fixed and variable) divided by the quantity of output produced.