An Increase in the Price of Labor Used to Produce

question 163

Multiple Choice

An increase in the price of labor used to produce good Y will lead to

• A)an increase in the market clearing price of good Y.
• B)an increase in the supply of good Y.
• C)a decrease in the demand for good Y.
• D)an increase in the demand for good Y.

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Definitions:

Journal Entry

A record in accountancy that captures the financial transactions of a company, showing the accounts affected and in which direction (debit or credit).

Convertible Securities

Financial instruments, such as bonds or preferred shares, that can be converted into a company’s common stock.

Diluted EPS

Earnings per share calculated by including all convertible securities, warrants, options, and other financial instruments that could potentially dilute the earnings per share if exercised.

Convertible Preferred Stock

A type of preferred stock that holders can convert into a specified number of common shares, usually after a predetermined date.