Wages for Workers Producing IPods and Similar Products Will Rise

question 498

Multiple Choice

Wages for workers producing iPods and similar products will rise next year. Walkman Watch asks you to predict the effect of this change in next year's market for iPods. You predict that the major effect will be that the

• A) demand curve for an iPod will shift leftward.
• B) supply curve for an iPod will shift rightward.
• C) demand curve for an iPod will shift rightward.
• D) supply curve for an iPod will shift leftward.

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Definitions:

Owner's Equity

The value that accrues to the owners of a company after settling all its debts, equivalent to the assets minus the liabilities.

Residual Equity

Residual Equity represents the amount of equity that remains for the common shareholders after all liabilities and preferential stock claims have been settled.

Assets

Assets are possessions of an individual or a business that hold value and can yield benefits in the future.

Liabilities

Financial obligations or debts that a company owes to outside parties, which must be paid back in the future.