Other Things Equal,the Own-Wage Elasticity of Demand for a Category

question 8

Multiple Choice

Other things equal,the own-wage elasticity of demand for a category of labor is higher when

• A) the price elasticity of demand for the product being produced is low.
• B) other factors of production can be easily substituted for the category of labor.
• C) the supply of other factors of production is highly inelastic.
• D) the cost of employing the category of labor is a small share of the total costs of production.

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Definitions:

Bargaining Zone

The range within which agreement is possible in negotiations between parties, including the minimum and maximum limits each party is willing to consider.

Reservation Point

The least favorable point at which one will accept a deal during negotiations; it's the bottom line or minimum outcome acceptable.

Culture

A shared set of beliefs, values, and patterns of behaviour common to a group of people.

Negotiations

The act of discussing and arriving at a mutual agreement between parties with different interests or desires.