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:

Milligram

A unit of mass equal to one thousandth of a gram.

Gram

A measure of mass that corresponds to 1/1000th of a kilogram.

Kilograms

The base unit of mass in the International System of Units (SI), equivalent to 1000 grams.

Gram

A unit of measure for mass that is equal to 0.001 kilograms.