The Size of the Reduction in Quantity of Labor Hired

question 32

Multiple Choice

The size of the reduction in quantity of labor hired by a firm due to an increase in the wage rate depends upon all of the following except

• A)what percentage of total costs are made up of labor costs.
• B)how much quantity demanded in the output market will be reduced by a higher price.
• C)the capital to labor ratio before the wage increase.
• D)how easily other inputs can be substituted for labor.

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Definitions:

Collateral

An asset pledged as security for repayment of a loan, to be forfeited in the event of a default.

Liens

Legal claims or holds on property as security for the payment of a debt or performance of some obligation.

Priority

The status of being more important or urgent than something else, often determining the order in which tasks or responsibilities are addressed.

Secured Transaction

Any transaction in which the payment of a debt is guaranteed, or secured, by personal property owned by the debtor or in which the debtor has a legal interest.