Suppose the Wage Rate in the Labor Market Is $15

question 214

Multiple Choice

Suppose the wage rate in the labor market is $15 and the demand for labor decreases. If wages are sticky,

• A) unemployment decreases.
• B) unemployment increases.
• C) unemployment stays the same.
• D) wages decrease to eliminate the surplus.

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Definitions:

Economic Order Quantity

is a formula used to determine the optimal order size that minimizes the sum of ordering, holding, and stockout costs.

Inventory Carrying Costs

The total cost associated with holding inventory, including storage, handling, depreciation, and opportunity costs.

Capital Costs

Expenses incurred to create or acquire fixed assets, such as buildings or machinery, that are used in producing goods or services.

Inventory Service Costs

Expenses associated with storing, handling, and managing inventory, including warehousing and insurance costs.