Suppose There Are 100 Firms in a Market and All

question 62

Multiple Choice

Suppose there are 100 firms in a market and all are identical. Firm A will hire 20 workers when the wage rate is $10, 25 workers when the wage rate is $9, and 30 workers when the wage rate is $8. The equilibrium wage rate for a number of years has been $9. If the wage rate falls to $8, we know that

• A) the quantity demanded for the market will increase to 3,000 workers.
• B) the quantity demanded for the market will increase to more than 3,000 workers.
• C) the quantity demanded for the market will increase to less than 3,000 workers.
• D) the quantity demanded for the market will increase, but we can't tell which of the above answers is correct.

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Definitions:

Job Ranking Method

A simple evaluation system where jobs are ranked in order based on their perceived value or complexity.

Point System

A method used to track, measure, or assign value to certain actions, behaviors, or outcomes, often used in performance evaluation or reward programs.

Lag Strategy

A business approach where a company chooses to delay action or innovation, often to observe competitors' performance or reduce risk.

Compensation Philosophies

The underlying beliefs and principles that guide how an organization values and rewards its employees' contributions and efforts.