If the Absolute Elasticity of Labor Demand Is 2

question 33

Multiple Choice

If the absolute elasticity of labor demand is 2.0,then an eight percent increase in the wage will

• A) increase employment by 16%.
• B) increase employment by 4%.
• C) decrease employment by 16%.
• D) decrease employment by 4%.

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Definitions:

Dividends

These are distributions of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.

Shareholders

Individuals or entities that own shares in a corporation, thus having an interest in its performance and profitability.

Corporation

A legal entity that is separate from its owners, providing them with limited liability, and has the ability to own assets, incur liabilities, and sell shares.

Interest Rate

The percentage charged by a lender to a borrower for the use of assets, typically expressed as an annual percentage of the principal.