If Workers Who Make DVDs Get a Pay Raise, the Equilibrium

question 497

Multiple Choice

If workers who make DVDs get a pay raise, the equilibrium price of a DVD ________ and the equilibrium quantity of DVDs ________.

• A) rises; increases
• B) rises; decreases
• C) falls; decreases
• D) falls; increases

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Definitions:

Labor

Human input, involving both muscle and mind work, in the output of goods and services.

Production Function

A model that defines the maximum output that can be produced with a given set of inputs under current technology.

Plastic

A wide range of synthetic or semi-synthetic materials that are used in the production of industrial products, packaging, and consumer items.

Wood

A hard, fibrous material made from trees or shrubs, often used for construction, furniture, and fuel among other applications.