If We Were to Observe Above-Equilibrium Wages in a Particular

question 132

Multiple Choice

If we were to observe above-equilibrium wages in a particular labor market, then a possible explanation might be that

• A)the theory of efficiency wages holds true for that market.
• B)there is a powerful labor union representing workers in that market.
• C)workers are largely unskilled and/or inexperienced and minimum-wage laws are effectively holding wages up in that market.
• D)All of the above are correct.

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Definitions:

Provision For Inventories

An accounting practice where a reserve is made for potential decreases in the value of a company’s inventory.

Inventories Losses

Reductions in the amount or value of inventories due to factors such as deterioration, obsolescence, or theft, resulting in financial loss.

Lower Of Cost

An accounting principle requiring that the inventory is recorded at the lower of its cost or the current market value.

Net Realisable Value

The estimated selling price of goods, minus the costs of their completion and the costs needed to make the sale.