If the Supply of Labour Decreases,which of the Following Events

question 11

Multiple Choice

If the supply of labour decreases,which of the following events will occur?

• A)The wage rate will decrease and firms will increase the number of workers to the point at which the value of marginal product equals the new wage rate.
• B)The wage rate will decrease and firms will decrease the number of workers to the point at which the value of marginal product equals the new wage rate.
• C)The wage rate will increase and firms will decrease the number of workers to the point at which the value of marginal product equals the new wage rate.
• D)The wage rate will increase and firms will decrease the number of workers to the point at which the value of marginal product is greater than the new wage rate.
• E)The wage rate will increase and firms will decrease the number of workers to the point at which the value of marginal product is less than the new wage rate.

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Definitions:

Allowance Method

A method in accounting that estimates uncollectible accounts to account for potential bad debts at the conclusion of each period.

Estimated Uncollectible

An accounting term for the prediction of the amount of receivables that will not be collected from customers, also known as allowance for doubtful accounts.

Total Assets

The sum of all current and non-current assets that a company owns, representing the total resources available to the business for use.

Allowance Method

An accounting technique that estimates and anticipates uncollectible accounts receivable and bad debts by establishing an allowance for doubtful accounts.