Without Productivity Growth, What Is the Long-Run Effect of Labor

question 156

Multiple Choice

Without productivity growth, what is the long-run effect of labor migration?

• A) There will be an increase in production in the sector using labor intensively.
• B) There will be clear gains to owners of capital versus labor.
• C) There will be clear gains to labor versus owners of capital.
• D) There will be a shift of world resources toward the high-income nations.

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Definitions:

Labor Rate Variance

The difference between the actual labor rate paid and the standard rate expected, multiplied by the total hours worked.

Labor Efficiency Variance

The variance between the real hours spent producing a good or service and the anticipated standard hours, times the standard wage rate.

Variable Overhead Rate Variance

The difference between the actual variable overhead costs incurred and the standard variable overhead expected for the actual production achieved.

Variable Overhead Efficiency Variance

A measure used in cost accounting to evaluate the efficiency of variable production costs, comparing the actual hours worked to the standard hours expected.