Final answer:
The gross rate of pay for a monthly-rated employee with variable working days can be calculated using a fixed rate or based on actual hours worked. Real-world labor market dynamics, such as inelastic supply curves and wage changes, can affect working hours and overall income. The correct option is b.
Step-by-step explanation:
The question relates to the calculation of gross rate of pay for a monthly-rated employee whose working days vary over consecutive weeks.
The gross pay may be computed in various ways: (a) a fixed rate regardless of the actual days worked, (b) based on the total number of hours worked over the period, (c) adjusted according to the number of rest or non-working days, or (d) a set monthly rate unaffected by the variations in working days.
In real-world scenarios, labor market responses to wage changes can impact the number of hours employees work. For instance, a minimum wage worker might experience a 10% raise in wages but work 2% fewer hours throughout the year due to employers' reactions to increased labor costs.
Despite the reduction in hours, such a worker's overall income could still rise if the pay raise offsets the decrease in hours worked. The correct option is b.