Suppose That the Market for Labor Is Initially in Equilibrium

question 3

Multiple Choice

Suppose that the market for labor is initially in equilibrium.If the firm employs labor-saving technology,

• A) the equilibrium wage and the quantity of labor will both rise.
• B) the equilibrium wage and the quantity of labor will both fall.
• C) the equilibrium wage will rise and the quantity of labor will fall.
• D) the equilibrium wage will fall and the quantity of labor will rise.

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Definitions:

Exponential Distribution

A continuous probability distribution used to model the time between events in a Poisson point process, characterized by a constant mean rate or rate parameter.

Upper Limit

The upper limit refers to the highest value or boundary that a certain data range, interval, or measurement can reach.

Random Variable

A variable whose outcomes are determined by a random phenomenon, used in probability and statistical analysis.

Normal Distribution

A harmonized distribution of probability about the mean, portraying that near-mean occurrences are more common than those far from the mean.