Economic Theory Predicts That an Increase in Wages

question 230

Multiple Choice

Economic theory predicts that an increase in wages

• A)will cause a wage earner to work more.
• B)will cause a wage earner to work less.
• C)will cause a wage earner to be more productive.
• D)might cause a wage earner to work more or work less.

---

Definitions:

High-low Method

A technique used in managerial accounting to estimate fixed and variable costs by analyzing the highest and lowest levels of activity and the associated costs.

Variable Cost

A cost that varies directly with the level of production or volume, such as materials and labor directly involved in the production process.

Least-squares Method

A statistical technique used to determine the line of best fit by minimizing the sum of the squares of the differences between observed and estimated values.

High-low Method

A technique used in cost accounting to determine the variable and fixed components of a cost by analyzing the highest and lowest levels of activity.