Labor Is a Resource That Is Necessary to Produce Many

question 126

Multiple Choice

Labor is a resource that is necessary to produce many goods."If the price of labor falls," says the economist,"the prices of goods will soon follow." How does this work?

• A) If the price of labor falls,the supply of goods rises,and the prices of those goods fall.
• B) If the price of labor falls,the quantity supplied of goods rises,and the prices of those goods fall.
• C) If the price of labor falls,the demand for goods falls,and the prices of those goods fall.
• D) If the price of labor falls,the demand for goods rises,and the prices of those goods fall.
• E) If the price of labor falls,the supply of goods falls,and the prices of those goods fall.

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Definitions:

Depreciation

A reduction in the value of an asset over time, due to wear and tear, age, or obsolescence.

Net Investment

The total spending on new capital assets minus the depreciation on existing assets, indicating the growth in a company’s or economy's capital stock.

Depreciation

The method by which a company allocates an asset's cost over its useful life, reflecting the consumption of the asset's economic benefits.

Disposable Income

The reserve of funds households possess for spending and saving after income tax payments.