Each workers get paid $5000 a month. You can bring on or layoff workers each month based on needs. If 2 workers are hired then:
Answer: Labor costs are $10,000 and it is considered an explicit variable cost
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The fallacy of composition is:
a. the erroneous view that an economic activity can sometimes exceed the sum of its components b. the erroneous view that what is true for the individual will also be true for the group. c. the view that the aggregation of economic activity will necessarily lead to an outcome that is different than the outcome generated by each individual in the group. d. the idea that association need not imply causation.
Suppose in Country X, anticipating high inflation in the economy, wages of workers are increased in the beginning of a financial year. However, prices remain unchanged during the year. Everything else remaining constant, which of the following will be observed in this economy?
a. The cost of labor, that is the real wage will decline b. The current profits of the firm will rise c. Aggregate supply in the economy will increase d. Annual production in the economy will remain unaffected e. The aggregate supply curve will move to the left