The Size of the Reduction in Quantity of Labor Hired

question 32

Multiple Choice

The size of the reduction in quantity of labor hired by a firm due to an increase in the wage rate depends upon all of the following except

• A)what percentage of total costs are made up of labor costs.
• B)how much quantity demanded in the output market will be reduced by a higher price.
• C)the capital to labor ratio before the wage increase.
• D)how easily other inputs can be substituted for labor.

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Definitions:

Appellate Courts

Courts that have the authority to review and change outcomes of decisions made by lower courts.

Common Law

A body of law derived from judicial decisions of courts and similar tribunals, rather than from statutes or written legislation.

Statutory Law

Law established by enacting statutes or legislation, as opposed to common law or case law.

Binding Precedent

A legal principle established in a previous case that must be followed by all lower courts in the same jurisdiction in cases with similar circumstances.