When a Union Raises the Wage Above the Equilibrium Level,it

question 37

Multiple Choice

When a union raises the wage above the equilibrium level,it

• A)reduces both the quantity of labor supplied and the quantity of labor demanded.
• B)reduces the quantity of labor supplied and raises the quantity of labor demanded.
• C)raises the quantity of labor supplied and reduces the quantity of labor demanded.
• D)raises both the quantity of labor supplied and the quantity of labor demanded.

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Definitions:

Variable Costing

An accounting method that only considers variable costs (costs that vary with the level of output) when calculating the cost of goods sold and production.

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a unit of product.

Net Operating Income

Represents the difference between operating revenues and operating expenses.

Common Fixed Expenses

Expenses that do not vary with the level of production or sales, shared among different business segments or products.