The correct answer is B. Real wages.
Real wages are the purchasing power of wages, and they are calculated by dividing nominal wages by the price level. A higher real wage means that workers can buy more goods and services with their wages.
Nominal wages are the amount of money that workers are paid per hour or per week. They are not adjusted for inflation, so they do not necessarily reflect the purchasing power of wages.
Average product is the amount of output produced per worker. It is calculated by dividing total output by the number of workers. Average product is not a good measure of the standard of living because it does not take into account the distribution of income.
Government policy can affect the standard of living of workers through a variety of means, such as minimum wage laws, unemployment benefits, and social security. However, government policy is not the only factor that determines the standard of living of workers. Other factors, such as the level of education and skills of the workforce, the level of technology, and the structure of the economy, also play a role.