Which of the Following Is True of Labor Markets

question 66

Multiple Choice

Which of the following is true of labor markets?

• A) Organizations compete to sell labor in the labor market.
• B) Competition for labor establishes the minimum an organization must pay to hire an employee for a particular job.
• C) Changes in the CPI do not affect the labor market.
• D) Cost-of-living considerations have little impact on labor-market rates.
• E) An organization's competitors in labor markets typically include only companies with different products.

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Definitions:

Market Price

The market rate for buying or selling an asset or service in a public trading environment.

Producer Surplus

The gap between the minimum amount sellers are prepared to accept for a product or service and the actual payment they get.

Equilibrium

The point at which the quantity of a product or service demanded by consumers equals the quantity supplied by producers, leading to a stable market condition.

Market Equilibrium

The condition in which a market's supply and demand balance each other, and as a result, prices become stable.