If Wages Rise by 12 Percent at the Same Time

question 18

Multiple Choice

If wages rise by 12 percent at the same time prices rise by 3 percent, then the increase in real wages is equal to

• A)12 percent.
• B)9 percent.
• C)6 percent.
• D)3 percent.

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Definitions:

Contribution Margin

The difference between the sales revenue of a company and its variable costs.

Break-even Sales

Break-even sales refer to the amount of revenue required to cover all fixed and variable costs, resulting in zero profit or loss.

Selling Price

The amount of money a buyer pays to acquire a product or service.

Fixed Costs

Expenses that do not change in total regardless of changes in the level of production or sales activities within a certain range.