Suppose the Price of the Product That Labor Is Producing

question 202

Multiple Choice

Suppose the price of the product that labor is producing increases and simultaneously the price of capital, which is substitutable for labor, decreases. Assuming that the substitution effect is greater than the output effect, the demand for labor

• A) will increase.
• B) will decrease.
• C) may either increase or decrease.
• D) will not change.

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Definitions:

Productivity

The efficiency at which goods or services are produced, especially in terms of the amount produced compared to the amount of resources used.

Sexual Harassment

Unwanted and inappropriate sexual remarks or physical advances in a workplace or other professional or social situations.

Illegal

Contrary to or forbidden by law; unlawful.

Unethical

Acting in a way that is morally wrong or not conforming to accepted standards of behavior.