Labor costs usually increase at an increasing rate at high levels of output for all of the following reasons except
A) labor productivity begins to decline
B) the marginal gains from specialization decrease
C) the price of labor rises as more workers are hired
D) the workers hired later may not be as qualified
E) fuel costs begin to increase as more output is produced

Question

Quizplus · Accepted Answer

Reasons A, B, C, and D directly relate to labor costs and their efficiency. However, E (fuel costs begin to increase as more output is produced) is related to operational costs, not specifically to the cost or efficiency of labor.

Labor Costs Usually Increase at an Increasing Rate at High