Given a 10 Percent Decrease in Wages, Firm a Hires

question 39

Multiple Choice

Given a 10 percent decrease in wages, firm A hires more labor than firm B. It follows that, ceteris paribus ,

• A)the elasticity of demand for the product that firm A produces is likely lower than the elasticity of demand for the product that firm B produces.
• B)firm A likely has a lower labor cost-total cost ratio than firm B.
• C)firm A likely has more substitutes for labor than firm B.
• D)firm A likely has higher per-unit costs than firm B.

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Definitions:

Behavioural Style

Behavioural style pertains to an individual's consistent patterns of actions and reactions, showcasing their preferred way of behaving, responding, and communicating in various situations.

Successful Minority

Describes a subgroup within a larger population that achieves a higher level of success compared to the average, often despite facing systemic barriers.

Principled

Acting in accordance with morality and showing recognition of right and wrong.

Disrupt

To interrupt by causing a disturbance or problem, significantly altering or destabilizing the status quo.