Labor adjustment costs tend to be higher when I. market wages rise. II. the declining industries are unionized. III. moving costs are high.

Question

Quizplus · Accepted Answer

Labor adjustment costs tend to be higher when the declining industries are unionized, which is option II. Moving costs are also a factor that increases these costs, as identified in option III. Option I, however, is not necessarily true. Market wages rising can lead to higher costs for firms, but it does not necessarily increase labor adjustment costs for workers shifting from one industry to another. Therefore, only options II and III are correct.

Labor Adjustment Costs Tend to Be Higher When I