Given an 8 Percent Increase in Wages, Firm a Cuts

question 161

Multiple Choice

Given an 8 percent increase in wages, firm A cuts back on labor more than firm B. It follows that, ceteris paribus ,

• A)there are likely fewer substitutes for labor in firm B than firm A.
• B)there are likely fewer substitutes for labor in firm A than firm B.
• C)sunk costs are greater for firm A than firm B.
• D)the demand for the product that firm A produces is likely less elastic than the product that firm B produces.

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Definitions:

Criminal Commitment

A legal process by which individuals are detained in a mental health institution after being found guilty of a crime, due to mental illness.

Psychiatric Institution

A facility specialized in providing treatment and care for individuals with mental health disorders or illnesses.

Judicial System

The system of courts and tribunals established by a government for the administration of justice in a country.

Mental Institution

A hospital or specific facility dedicated to the care and treatment of individuals with mental disorders.