The Government Recently Imposed a Number of Regulations on Companies

question 96

Multiple Choice

The government recently imposed a number of regulations on companies that will make it more expensive for companies to hire workers.What consequence will this have on market?

• A) These regulations raise the cost of labor and shift supply to the left.
• B) These regulations raise the cost of labor and shift supply to the right.
• C) These regulations raise the cost of labor and cause a rightward movement along the supply curve.
• D) These regulations raise the cost of labor and cause a leftward movement along the supply curve.
• E) These regulations will not affect the supply curve.

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Definitions:

Diminishing Returns

A principle stating that if one factor of production is increased while other factors are held constant, the incremental increases in output will eventually decrease.

Labor

The human effort, physical or mental, used in the production of goods and services.

Marginal Product

Marginal Product is the additional output resulting from the use of one more unit of a production input, holding all other inputs constant.

Units of Output

The quantities of a good or service produced by a firm or economy.