When a factor's price increases in job A relative to job B, then, ceteris paribus, the
A) non- monetary advantages of job A will increase.
B) net advantage of job A will increase relative to job B.
C) non- monetary advantages of job B will decrease.
D) monetary advantage of job A will increase, but not its net advantage.
E) net advantage of job B will increase relative to job A.

Question

Quizplus · Accepted Answer

When the price of a factor increases in one job relative to another, the net advantage of the job with the increased price decreases, while the net advantage of the other job increases. Therefore, the net advantage of job A will increase relative to job B.

When a Factor's Price Increases in Job a Relative to Job