The Elasticity of Demand for Labor Is 2

question 9

Multiple Choice

The elasticity of demand for labor is 2.16. It follows that if the

• A)wage rate changes by 10 percent, the demand for labor changes by 2.16 percent.
• B)demand for labor changes by 2.16 percent, the wage rate changes by 1.0 percent.
• C)wage rate changes by 10 percent, the quantity demanded of labor changes by 21.6 percent.
• D)wage rate changes by 2.16 percent, the quantity demanded of labor changes by 2.16 percent.

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Definitions:

Constant Dividend

A dividend policy in which a company pays a fixed amount in dividends to shareholders permanently or over a long period.

Required Return

The lowest profit anticipated by an investor from a specific investment, considering the associated risks.

Dividend

A portion of a company's earnings distributed to shareholders, usually in cash or additional stock.

Equity Investments

Investments in stock or equity securities, giving the investor partial ownership in a company.