The Figure Given Below Represents Equilibrium in the Labor Market

question 29

Multiple Choice

The figure given below represents equilibrium in the labor market with the demand and supply curves of labor.Figure 14.6
In the figure,
D = MRP implies demand for labor = Marginal Revenue Product
MFC represents Marginal Factor Cost curve
S represents the supply curve of labor

-If resource A and resource B are substitutes of each other and the price of resource A increases, then:

• A)the price elasticity of demand for resource B will increase.
• B)the demand for resource A will increase.
• C)the demand for resource B will increase.
• D)the price elasticity of demand for resource B will decrease.
• E)the demand for resource B will decrease.

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Definitions:

Equity-Financed

Funding company operations, projects, or purchases through the issuance of stock, thereby raising capital without incurring debt.

NPV

Net Present Value (NPV) is a financial metric used to evaluate the profitability of an investment or project, by calculating the difference between the present value of cash inflows and outflows over a period.

Incremental Value

The additional or increased value generated by a new investment, project, or action compared to the value without undertaking the activity.

Merger Premium

The extra amount an acquiring company pays over the market price of the target company during a merger.