When a Firm Decides to Hire More Workers Because Local

question 151

Multiple Choice

When a firm decides to hire more workers because local wage rates have decreased, this is an example of

• A) market failure.
• B) substitution in production.
• C) labor exploitation.
• D) substitution in consumption.

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Definitions:

Liabilities

Liabilities refer to the financial obligations or debts that an entity owes to others, which must be settled through the transfer of assets or providing services.

Revenue

The income generated from normal business operations, calculated as the total sales of goods or services.