The Long-Run Labor Demand Curve Is Relatively Flatter Than the Short-Run

question 65

Multiple Choice

The long-run labor demand curve is relatively flatter than the short-run labor demand curve because,in the short run,

• A) the wage rate is fixed.
• B) the firm cannot vary the amount of capital used.
• C) the firm is a price taker.
• D) All of the above.

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Definitions:

Consumption

(rephrased) involves the utilization of goods and services by individuals or communities, primarily for personal satisfaction and basic needs.

WARP

WARP, or the Weak Axiom of Revealed Preference, is a consistency criterion for consumer choice behavior, suggesting that if a consumer prefers bundle A over bundle B when both are affordable, they should not choose B when A is still affordable.

Bundle

A collection of items or services grouped together as a single package.

Laspeyres Price Index

A price index calculated by taking the ratio of the total cost of purchasing a specified set of goods and services at current prices to the total cost of purchasing the same set of goods and services at base period prices, using base period quantities as weights.