If the Price of Labor Falls, We Can Expect

question 200

Multiple Choice

If the price of labor falls, we can expect:

• A) demand for labor will increase.
• B) quantity demanded of labor will increase.
• C) demand for labor will decrease.
• D) quantity demanded of labor will decrease.
• E) marginal factor cost to rise in a competitive market.

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Definitions:

Sherman Antitrust Act

A landmark 1890 U.S. legislation aimed at prohibiting monopolies and other practices that restrained competition and trade.

Fixing Prices

The practice of setting the price of a product or service, rather than allowing it to be determined naturally through free-market forces.

Oligopoly Outcome

In markets dominated by a small number of firms (an oligopoly), the outcome often includes non-price competition, strategic interactions, and potentially higher prices and lower outputs than in competitive markets.

Prisoners' Dilemma

A situation in game theory in which two individuals acting in their own self-interest pursue a course of action that does not result in the ideal outcome for either party.