Final answer:
True, the manufacturing labor budget is influenced by wage rates, production methods, and hiring plans, with firms possibly opting for more capital-intensive production as wages rise.
Step-by-step explanation:
TRUE: The manufacturing labor budget indeed depends on several key factors, including wage rates, production methods, and hiring plans. For example, if a firm faces increased wage rates due to union demands, the firm may adjust its production methods to favor more machine use and less labor, which can affect the overall budget for manufacturing labor.
The cost-benefit analysis depicted in this scenario shows that as wages increase, firms often have an incentive to reduce the number of hours of labor – this involves transitioning towards plans that utilize more machinery. This shift can potentially increase labor productivity as workers may be assisted by better physical capital, but could also lead to reductions in workforce due to the reliance on automated processes.