When Firms in a U

question 24

Multiple Choice

When firms in a U.S. industry outsource some of their production,

• A) both U.S. labor demand and U.S. wages in the industry fall
• B) U.S. labor demand falls, but U.S. wages are not affected.
• C) U.S. labor demand remains unchanged, but U.S. wages fall.
• D) U.S. labor demand falls, but U.S. wages increase.

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Definitions:

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded by consumers, typically downward sloping to the right indicating an inverse relationship.

Tax on Buyers

A financial charge imposed directly on consumers, which tends to shift the demand curve downward, reflecting a decrease in the quantity demanded at each price.

Buyers Pay More

Refers to situations where consumers end up paying a higher price for goods or services due to various factors like increased demand or decreased supply.

Tax on Sellers

A financial charge imposed by a government on sellers of goods or services, which can affect market prices and quantities.