If a Perfectly Competitive Firm Finds That the Productivity of Its

question 141

Multiple Choice

If a perfectly competitive firm finds that the productivity of its workers has increased,then

• A)labor supply increases.
• B)labor demand decreases.
• C)the wage rate decreases.
• D)labor demand increases.

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Definitions:

Strike Price

The specified price at which the buyer of an option can buy (for a call option) or sell (for a put option) the underlying asset.

Net Profit

The amount of income that remains after all operating expenses, taxes, and costs have been subtracted from total revenue.

Call Contracts

Financial derivatives that give the holder the right, but not the obligation, to buy an asset at a set price within a specific time period.

Underlying Stock

The security on which a derivative instrument, such as an option or a warrant, is based.