Assume That Labor Is a Variable Input

question 121

Multiple Choice

Assume that labor is a variable input. The average wage of workers increases in a purely competitive industry. This change will result in a(n)

• A) increase in marginal cost for firms in the industry and an increase in the industry supply curve.
• B) decrease in marginal cost for firms in the industry and a decrease in the industry supply curve.
• C) decrease in marginal cost for firms in the industry and an increase in the industry supply curve.
• D) increase in marginal cost for firms in the industry and a decrease in the industry supply curve.

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Definitions:

Sampling Distribution

The probability distribution of a given statistic based on a random sample, which can provide insight into the properties of the population from which the sample was drawn.

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The period during which a product or component is expected to perform its intended function satisfactorily under normal usage conditions.

K-Mart

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