Suppose That the Labor Market for Life Guards Is Initially

question 368

Multiple Choice

Suppose that the labor market for life guards is initially in equilibrium. Whistles are an important safety tool that life guards use as a part of their jobs. A fire destroys the largest factory that produces whistles. What happens to the equilibrium wage and quantity of life guards?

• A)Both the equilibrium wage and quantity increase.
• B)Both the equilibrium wage and quantity decrease.
• C)The equilibrium wage increases, and the equilibrium quantity decreases.
• D)The equilibrium wage decreases, and the equilibrium quantity increases.

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Definitions:

End-of-period Spreadsheet

A reporting tool used in accounting to compile all balances from ledgers, facilitating the preparation of financial statements.

Trial Balance

A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit account columns to ensure accuracy in the financial statements.

Closing Entries

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to permanent accounts.

General Ledger

The master accounting document that contains all the financial accounts and transactions of a company.