Labor Demand Is More Elastic the Greater the Elasticity of Demand

question 6

Multiple Choice

Labor demand is more elastic the greater the elasticity of demand for the firm's output because

• A) the firm would see its quantity demanded fall substantially if the firm tried to pass increased labor costs through to the consumer by increasing the price of the output good.
• B) the firm's output price falls when the firm produces less output.
• C) a firm that operates in a competitive output market cannot lower its price.
• D) capital is usually price elastic.
• E) the firm will want to hire fewer workers when the wage rate increases.

---

Definitions:

Oil And Gas

Natural hydrocarbons that are extracted from the Earth and used as fuel sources for heating, transportation, and the generation of electricity.

Coal

A fossil fuel consisting mainly of carbonized plant matter, found underground and used for energy production.

Oil Shale

A sedimentary rock consisting of organic materials that can be processed to produce shale oil, a type of unconventional petroleum.

Geologic Structure

The arrangement and relationship of rock layers and formations, shaped by tectonic forces, that reveals the history of Earth's crust.