Refer to the Given Data

question 280

Multiple Choice

Refer to the given data. Suppose that the union that provides labor to firms in this market successfully negotiates an increase in the wage rate from $12 to $14. As a result of the wage increase, firms will hire

• A)fewer workers, and the total paid out for wages will decline.
• B)fewer workers, and the total paid out for wages will increase.
• C)fewer workers, and the total paid out for wages will remain unchanged.
• D)more capital, if capital and labor are used in fixed proportions in production.

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Definitions:

Prospectus

A document required that describes the current status of a business and its future prospects.

Over-subscription

A situation where the demand for a company's new share offering exceeds the available supply.

AASB 101

Denotes the Australian Accounting Standards Board Standard 101, prescribing the basis for presentation of general purpose financial statements to ensure comparability both with the entity's financial statements of previous periods and with the financial statements of other entities.

Equity

Equity represents the value that would be returned to a company's shareholders if all of the assets were liquidated and all of the company's debts were paid off.