Which of the following would be an expected result of substantially higher wages in the U.S. automobile industry?
A) an increase in the real wages of workers outside the industry
B) an increase in the price of automobiles produced in the United States
C) a reduction in the demand for foreign-produced automobiles
D) an increase in the profit rate of U.S. automobile producers

Question

Quizplus · Accepted Answer

If wages in the U.S. automobile industry substantially increase, then the cost of producing automobiles will increase. This will likely lead to an increase in the price of automobiles produced in the United States in order for automobile producers to maintain profit margins.  This increase in production costs will ultimately be passed on to consumers in the form of higher prices.

Which of the Following Would Be an Expected Result of Substantially