Suppose Demand Conditions in Industries X and Y Are Identical

question 31

Multiple Choice

Suppose demand conditions in industries X and Y are identical but that productivity increases by 5% in industry X and 2% in industry Y.If economy-wide productivity and the average wage each rise by 3%,we should expect that unit labor costs will:

• A)increase by the same amount in both industries,in accord with the overall increase in the average wage
• B)increase in both industries,but more in industry X than industry Y
• C)increase in industry X and decrease in industry Y
• D)decrease in industry X and increase in industry Y

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Definitions:

Median

The score that falls in the middle of all the scores on the test; also called the 50th percentile.

Predictive Validity

When a scale is related to a concrete outcome or behavior.

Discriminant Validity

The extent to which a construct is truly distinct from other constructs by empirical standards, often assessed through its lack of correlation with unrelated constructs.

Convergent Validity

When a scale correlates with other scales measuring the same construct.