The Real Wages of Workers Will Tend to Be High

question 10

Multiple Choice

The real wages of workers will tend to be high when

• A) output per worker is high.
• B) capital is scarce.
• C) industries are automating at a slow rate.
• D) profits are low.

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Definitions:

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.

Net Income

The total profit of a company after all expenses and taxes have been deducted from total revenues.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, highlighting the fixed versus variable costs structure of a business.

Variable Costs

Costs that change in proportion to the level of production or sales activity, such as raw materials and direct labor.