If Labor Is 20 Percent of Total Costs in Industry

question 145

Multiple Choice

If labor is 20 percent of total costs in industry A and 70 percent in industry B, then other things equal, we would expect the elasticity of demand for labor to be

• A) greater in industry A than in industry B.
• B) greater in industry B than in industry A.
• C) the same in both industries.
• D) uncertain since no general relationship exists between cost shares and elasticities.

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Definitions:

Dense

Having parts closely compacted together; thick or crowded, can refer to both physical objects and abstract concepts like population or ideas.

Cylinder Seal

A cylindrical piece of stone usually about an inch or so in height, decorated with an incised design, so that a raised pattern is left when the seal is rolled over soft clay. In the ancient Near East, documents, storage jars, and other important possessions were signed, sealed, and identified in this way. Stamp seals are an earlier, flat form of seal used for similar purposes.

Sound Box

The part of a musical instrument where the sound resonates, often found in stringed instruments like guitars or violins.

Colonnade

A series or row of columns, usually spanned by lintels.