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:

Current Position Analysis

Evaluation of a company’s current financial health and performance, focusing on its liquidity, solvency, and profitability.

Vertical Analysis

A method of financial statement analysis in which each entry for each of the three major categories of accounts (assets, liabilities, and equity) or income and expense is represented as a proportion of the total account.

Percentage Analysis

A financial analysis technique that involves expressing each item in a financial statement as a percentage of a base amount to assess the financial health and performance of a company.

Financial Statement

A formal record of the financial activities and position of a business, individual, or other entity, usually presented in a structured manner for a specific period.