If the Government Provides a Subsidy of $1 Per Hour

question 90

Multiple Choice

If the government provides a subsidy of $1 per hour to employers for hiring workers,________.

• A) the equilibrium employment will decrease
• B) the equilibrium real wage will increase
• C) labor supply will increase
• D) labor demand will decrease

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Definitions:

Unit Price

The cost assigned to a single unit of a product or service, facilitating price comparisons across different quantities.

Direct Labor Variance

The difference between the actual labor costs incurred and the standard labor costs expected for the actual production level, reflecting efficiency and cost control in production.

Per-unit Standards

Predetermined costs to produce a single unit of product, used in budgeting and cost control.

Direct Labor Hours

The total hours worked by employees directly involved in manufacturing products or providing services.