Which of the Following Would Cause Labor's Share of National

question 30

Multiple Choice

Which of the following would cause labor's share of national income to decrease?

• A)labor productivity increases less rapidly than the real wage rate.
• B)labor productivity increases more rapidly than the real wage rate.
• C)labor productivity has increased at the same rate as the real wage rate.
• D)labor's share of national income is not affected by the relative growth rates of labor productivity and the real wage rate.

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Definitions:

Marginal Cost

The increase or decrease in the total cost that arises when the quantity produced is incremented by one unit.

Labor Force

The total number of people who are currently employed or actively seeking employment within an economy.

Opportunity Cost

Represents the value of the best alternative that is foregone when a decision is made to pursue a certain action.

Household Income

The combined gross income of all members of a household, which can include wages, salaries, pensions, government benefits, and any other income.