In the Long Run, a Decrease in the Competitive Wage

question 17

Multiple Choice

In the long run, a decrease in the competitive wage will be associated with which of the following?

• A)A substitution effect in favor of employing more capital.
• B)A scale effect in favor of employing more labor.
• C)More employment if the wage decrease was a result of a decrease in the demand for labor.
• D)Less employment if the wage decrease was a result of an increase in the supply of labor.
• E)An increase in the output price.

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Definitions:

Clinical Depression

A serious mood disorder characterized by persistent feelings of sadness, hopelessness, and a lack of interest or pleasure in activities, affecting a person’s daily life.

Stressful Life Changes

Significant alterations in one's life situation, such as divorce or job loss, that can lead to increased stress and may necessitate psychological support.

Psychoanalysis

A therapeutic approach developed by Sigmund Freud that emphasizes unconscious processes and past conflicts as key influences on behavior.

Early Childhood Experience

These are events or conditions in one's early years, typically aged 0-6, that significantly influence psychological development and can impact behavioral patterns and mental health in adulthood.