Skilled Labor Will Benefit from an Increase in the Wage

question 5

Multiple Choice

Skilled labor will benefit from an increase in the wage rate paid to unskilled labor if:

• A)the substitution effect outweighs the output effect
• B)the output effect outweighs the substitution effect
• C)the output effect and substitution effect work in opposite directions
• D)skilled labor and unskilled labor are gross complements

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Definitions:

Optimal Foraging Hypothesis

A theory suggesting that animals maximize their net energy intake per unit of time spent foraging.

Hummingbird

A small bird known for its ability to hover in mid-air thanks to rapid wing flapping, feeding primarily on nectar and playing a role in pollination.

Nectar

A sweet liquid produced by plants, which serves as a food source for pollinators such as bees and butterflies.

Optimal Foraging Hypothesis

A theory suggesting that animals will maximize their net energy intake per unit of foraging time, leading to behaviors that are most efficient in gaining resources.