If the Wage Rate in the Labor Market Is $12

question 212

Multiple Choice

If the wage rate in the labor market is $12 and more previously unemployed people exited the labor force, which of the following statements is correct?

• A) If wages are flexible, then wages will decrease.
• B) If wages are sticky, the unemployment rate decreases.
• C) If wages are sticky, the unemployment rate stays the same.
• D) If wages are flexible, the unemployment rate increases.

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Definitions:

Cartel

An agreement among competing firms to control prices, production, and market shares, often to maximize collective profits by reducing competition.

Organization of Sellers

A collective or group of sellers or producers that aims to promote common interests, often including market and price controls.

Supply Decisions

Choices made by firms regarding the quantity of goods or services to produce and offer for sale.

Ford

Ford refers to the Ford Motor Company, a major American automaker known for its mass production of automobiles and the pioneering of assembly line manufacturing techniques.