An Increase in the Price of Labor (A Variable Resource)shifts

question 217

Multiple Choice

An increase in the price of labor (a variable resource) shifts

• A) all cost curves upward.
• B) the variable cost curves upward but leaves the fixed cost curves unchanged.
• C) the fixed cost curves upward but leaves the variable cost curves unchanged.
• D) the marginal cost curve rightward.
• E) none of the cost curves.

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Definitions:

Marginal Rate of Substitution

The rate at which a consumer is willing to give up one good in exchange for another good, while maintaining the same level of utility.

Good Y

A generic term used to denote a particular good or product in economic models.

Units

Refers to a measurement or quantity of something, often used in the context of production, sales, or inventory in various industries.

Utility Function

A function that reflects the satisfaction or utility a consumer derives from consuming goods or services.