The Concept of Demand Must Be Modified When Applied to Labor

question 2

Multiple Choice

The concept of demand must be modified when applied to labor markets to reflect the fact that:

• A)non-monetary characteristics of jobs may be as important to workers as their pay
• B)labor demand curves slope upward from left to right
• C)the demand for labor is derived from the demand for the various products that labor produces
• D)the demand for output is derived from the demand for labor used to produce that output

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Definitions:

Fixed Expenses

Costs that do not fluctuate with the volume of production or sales, such as rent, salaries, and insurance.

Opportunity Cost

The loss of potential gain from other alternatives when a particular alternative is chosen.

Variable Manufacturing Costs

Costs in manufacturing that vary with the level of production output, including direct labor, materials, and utilities.

Direct Labor

The labor costs directly associated with the manufacture of products, typically wages for workers who physically produce the goods.