Producers of DVDs Are Able to Lower the Wage Rate

question 278

Multiple Choice

Producers of DVDs are able to lower the wage rate that they pay to their workers. You predict that the

• A) price will rise.
• B) quantity supplied will decrease.
• C) supply curve will shift leftward.
• D) supply curve will shift rightward.

---

Definitions:

Working Capital

A measure of a company's liquidity, operational efficiency, and short-term financial health, calculated as current assets minus current liabilities.

Current Ratio

A financial indicator used to assess whether a company can handle its obligations in the short term, calculated by the ratio of current assets to current liabilities.

Acid-Test Ratio

A liquidity metric that measures a company's ability to pay off its current liabilities with its quick assets without relying on inventory sales.

Times Interest Earned

A financial metric that measures a company's ability to meet its debt obligations by comparing its interest expenses to its earnings before interest and taxes (EBIT).