Refer to Figure 31

question 74

Multiple Choice

Refer to Figure 31.3 for a competitive labor market.
A shift in labor supply from S₁ to S₂ could be caused by:.

• A) An increase in the wage rate.
• B) The unionization of another labor market.
• C) An increase in the price of the product being produced.
• D) An increase in the price of machinery used in the production of the product.

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Definitions:

Variable Cost

Costs that change in proportion to the level of output or activity in a business.

Fixed Costs

Costs that do not vary in proportion to the level of goods or services produced by a business, such as rent, salaries, and insurance premiums.

Operating Leverage

Operating Leverage is a measure of how revenue growth translates into growth in operating income, determined by the proportion of fixed versus variable costs a company has.

Variable Cost

Operational expenses of a business that alter in accordance with the level of activity.