(Consider This) Which of the Following Best Explains Why Total

question 84

Multiple Choice

(Consider This) Which of the following best explains why total compensation for U.S. workers has increased significantly over the past several decades, but take-home pay by U.S. workers has increased by much less?

• A) An increased share of total compensation has gone to provide health insurance to workers.
• B) The share of total compensation going to retirement accounts has increased relative to all other components of compensation.
• C) Total compensation is measured in current dollar terms; take-home pay is measured in inflation-adjusted dollars.
• D) Workers are receiving a much larger share of total compensation in the form of goods and services produced by the firms that employ them.

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Definitions:

More Elastic

Describes a situation where the demand or supply for a good is more responsive to changes in price.

Monopolistically Competitive

A market structure featuring many sellers offering differentiated products, with free entry and exit in the market.

Demand Curve

A graph that illustrates the relationship between the price of a good or service and the quantity demanded by consumers.

Variable Costs

Expenses that change in proportion to the level of production or company activity.