If Wage Rates Rise at the Same Time That Labor

question 128

Multiple Choice

If wage rates rise at the same time that labor productivity increases,what is the effect on short-run aggregate supply (SRAS) ?

• A) SRAS rises.
• B) SRAS falls.
• C) SRAS remains constant.
• D) SRAS may rise,fall,or remain constant.

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Definitions:

Scale Economies Index

A measure of the cost advantages that enterprises obtain due to their scale of operation, typically associated with cost per unit of output decreasing with increasing scale.

Cost-Output Elasticity

A measure of how the total cost of production responds to a change in the quantity of output produced.

Cost Function

A mathematical representation of how a firm's costs change with different levels of output, typically showing the relationship between costs and output quantity.

Average Age

A statistic that represents the mean age of a group of individuals or objects.