The Price Elasticity of Demand for Labor Will Be Smaller

question 304

Multiple Choice

The price elasticity of demand for labor will be smaller, the

• A) greater is the price elasticity of demand for the final product.
• B) easier it is to employ substitute inputs in production.
• C) smaller is the proportion of wage costs in the total cost of production.
• D) longer is the time period under examination.

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Definitions:

Shipping Costs

Expenses associated with the transport of goods from one location to another.

Liquidated Damages Agreement

A contractual provision that pre-determines the amount of damages to be paid if a party breaches the agreement.

Penal

Pertaining to punishment or penalties imposed for violations of laws or regulations.

Liquidated Damages

Predetermined sum agreed upon by the parties involved in a contract to be paid as compensation in case of breach, representing an estimate of actual damages that might result from non-performance.