Recall the Application About the Decrease in the Price of Wool

question 14

Multiple Choice

Recall the Application about the decrease in the price of wool in the 1990s to answer the following question(s) . In the 1990s, the world price of wool decreased by about 30 percent and prices have remained relatively low since then. In 2012, an organization in New Zealand proposed that sheep shearing be added to the Commonwealth Games and the Olympics as a spectator sport in an effort to increase the awareness and the demand for wool.
-According to the Application,why might introducing sheep shearing not be an effective policy to raise wool prices?

• A) Increased sheep shearing might decrease the demand for wool.
• B) Increased sheep searing might increase the demand for wool substitutes.
• C) Increased sheep shearing will definitely increase the demand for wool, causing the prices to drop.
• D) Increased sheep shearing will definitely increase the supply of wool, causing the prices to drop.

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Definitions:

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditure to the appropriate period for a more accurate financial statement.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenues, expenses, and profits or losses.

Prepaid Rent

An asset account that represents rent payments made in advance of the rental period.

Rent Expense

The cost incurred by renting property or equipment for business or personal use, typically recognized in accounting over the rental period.