Scenario 19-1 Ferris B., a Student at a Community College, Is Considering

question 197

Multiple Choice

Scenario 19-1
Ferris B., a student at a community college, is considering what he should do for summer employment. Two recruiters show up at his school in search of summer workers. Recruiter A is looking for lifeguards to patrol the beach at an exclusive island resort in the Caribbean. Recruiter B is looking for workers to staff positions at a summer youth camp.
-Refer to Scenario 19-1. Ferris is carefully considering the options that each recruiter presents. On the basis of knowledge obtained in his economics class, Ferris concludes that

• A)wages are unlikely to be affected by job requirements.
• B)since the lifeguard job would expose him to a threat of skin cancer, the wage will be low.
• C)if the lifeguard job has a requirement for special training or certification, the wage offer will be higher than otherwise.
• D)if the lifeguard job also requires a willingness to clean public restrooms, the wage offer will be lower than otherwise.

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Definitions:

Default Free

An investment that is considered to have no risk of failure to pay back principal or interest.

CGB Futures

Futures contracts based on Canadian Government Bonds, which allow investors to speculate on or hedge against future changes in the value of these bonds.

Quoted Price

The current price at which an asset or service can be bought or sold, often provided in financial markets or by vendors.

Natural Hedge

A transaction between two counterparties where both parties’ risks are reduced.