If labor costs are 60 percent of production costs,then a 15 percent increase in wage rates would increase production costs by:
A) 60 percent.
B) 45 percent.
C) 15 percent.
D) 9 percent.
If total production costs are $100,labor's share is $60.If wages go up 15 percent,the wage bill becomes $60 * 1.15 = $69.Total production costs rise to $109,which is a 9 percent increase.
Correct Answer:
Verified
Q50: What will the elasticity of resource demand
Q51: Other things being equal,the demand for a
Q52: Other things being equal,a labor union will
Q53: In firm X,labor costs are 85 percent
Q56: The elasticity of demand for labor varies:
A)
Q57: Which will not directly be a determinant
Q59: In which case below will the elasticity
Q189: A computer manufacturer's elasticity of demand for
Q193: A union representative observed that if the
Q198: Other things being the same, if the
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents