Suppose That All the Necessary Conditions Exist for the Realization

question 42

Multiple Choice

Suppose that all the necessary conditions exist for the realization of equal wage rates in every labor market, but that currently the wage rate in market X is higher than the wage rate in market Y. We expect that eventually the wage rate

• A)in market X will increase more.
• B)in market Y will decrease.
• C)in market X will decrease and the wage rate in market Y will increase.
• D)will not change in either market, because something out of the ordinary must have caused the wage rates in the two markets not to be equal.
• E)a and b

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Definitions:

Weighted Average Method

An inventory costing method that assigns an average cost to each item based on the total cost of goods available for sale and the total quantity available.

Applied Factory Overhead

Indirect costs related to manufacturing, allocated to goods based on a predetermined rate.

Direct Labor

The wages or expenses directly associated with the manufacturing of products or delivery of services.

Continuous Process

A production process that is non-stop and operates continuously over long periods.