If the Price of Ice in a Hurricane-Devastated Area Suddenly

question 32

Multiple Choice

If the price of ice in a hurricane-devastated area suddenly skyrockets, then ice suppliers will:

• A) enjoy high profits at the expense of consumers.
• B) limit the supply of ice in the area to sustain the skyrocketing price.
• C) ship more ice to the area and the price will fall.
• D) have an incentive to direct ice to its highest-valued uses.

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Definitions:

Wages Payable

Wages payable are the amounts owed to employees for work performed that have not yet been paid; it is a liability on the company's balance sheet.

Office Equipment

The tools, devices, or machinery used in an office setting to assist with day-to-day operations, including computers, printers, and furniture.

Credit Entry

An accounting entry that increases a liability or equity account, or decreases an asset or expense account, recorded on the right side of an account.

Asset Accounts

Accounts on a balance sheet that represent the resources owned by a company, which have value and can provide future benefits.