When Labour Productivity Decreases, the

question 24

Multiple Choice

When labour productivity decreases, the

• A)demand for labour curve shifts leftward and the real wage rate falls.
• B)supply of labour curve shifts rightward and the real wage rate fall.
• C)supply of labour curve shifts leftward and the real wage rate rises.
• D)demand for labour decreases and the supply of labour decreases, and the real wage rate rises, falls, or remains unchanged.
• E)demand for labour decreases and the supply of labour increases, and the real wage rate falls.

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Definitions:

Variable Cost

Costs that vary directly with the level of production or services provided, such as materials and labor.

Net Income

The total profit or loss of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Fixed Cost

A cost that does not change with an increase or decrease in the number of goods or services produced or sold.

Production Costs

Direct costs associated with the manufacturing of goods, including labor, materials, and overhead expenses.