Exhibit 12-2 in Exhibit 12-2, Which of the Following

question 84

Multiple Choice

Exhibit 12-2 In Exhibit 12-2, which of the following is true if the wage rate decreases from $14 to $6 per hour?

• A)The income effect dominates the substitution effect.
• B)The substitution effect dominates the income effect.
• C)No labor is supplied.
• D)The income effect equals the substitution effect.
• E)The supply curve is horizontal.

Recognize the importance of contribution margin in making decisions about product discontinuation or continuation.

Determine the relevance of sunk costs in decision-making processes.

Calculate the differential effect on profit from accepting special pricing orders.

Understand the concept of target costing and its application in a competitive marketplace.

---

Definitions:

Structured Interview

An interview in which a set of standardized questions with an established set of answers is used.

Non-Directive Style

Leadership or counseling approach where the leader or counselor provides minimal guidance, allowing individuals to explore thoughts and feelings independently.

Non-Standardized Questions

Questions that are not uniform or consistent across all instances, often customized to elicit specific information or responses in interviews or surveys.

Interview Plan

A structured outline prepared by an interviewer that includes the objectives, questions, and strategies to be used during an interview process.