In Comparing Two Otherwise Identical Industries X and Y,an Economist

question 1

Multiple Choice

In comparing two otherwise identical industries X and Y,an economist finds that labor demand is more elastic in industry X.Which of the following would support this finding?

• A)Capital and labor are less easily substituted for one another in X than in Y
• B)Labor costs as a percentage of total costs are relatively lower in X than in Y
• C)Product demand elasticity is higher in X than in Y
• D)Substitute resources have a less elastic supply in X than in Y

---

Definitions:

Fixed Number

A quantity that remains constant and does not change or vary in a given context.

Varying Amounts

Different quantities or measures of something without a fixed or exact number.

Stimulus Generalization

The process by which conditioned responses are triggered by stimuli that are similar, but not identical to, the original conditioned stimulus used during learning.

Discrimination

The act of treating people unequally based on characteristics such as race, age, or sex, resulting in prejudice.