Refer to the Given Data

question 199

Multiple Choice

Refer to the given data. Suppose that the union that provides labor to firms in this market successfully negotiates an increase in the wage rate from $16 to$19. As a result of the wage increase, firms will hire

• A)fewer workers, and the total paid out for wages will increase.
• B)fewer workers, and the total paid out for wages will decline.
• C)fewer workers, and the total paid out for wages will remain unchanged.
• D)more capital, if capital and labor are used in fixed proportions in production.

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Definitions:

Depreciation

A technique for distributing the expense of a physical asset throughout its period of usability.

Net Income

Net income is the total earnings of a company after all expenses and taxes have been deducted from revenue, indicating the company's profitability.

Operating Cash Flows

Cash generated from a company's normal business operations, indicating its ability to generate enough cash to maintain or expand operations.

Sunk Cost

Expenses that have been paid and cannot be retrieved, and therefore, should not impact upcoming business strategies.